The European Commission has announced it intends to review the EU Banking Directive in the next few months in order to open up cross-border banking mergers.
At present the Directive allows member states to block M&A on prudential grounds. Article 16 forces any company intending to acquire a majority stake in a bank to notify the authorities of that country, who can then block the merger if they feel the bidder is unsuitable.
In the specific wording of the Article, a merger can be blocked if: ?in view of the need to ensure sound and prudent management of the credit institution, [the authorities] are not satisfied as to the suitability of the person.?
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