The Supervision of Mergers in the EU Banking Sector

Title: The Supervision of Mergers in the EU Banking Sector

Speaker: Sarah Cichon (PhD candidate at Humboldt-University Berlin and visiting researcher at the University of Oxford)

Abstract: In this session Sarah will present her ongoing research on the EU law framework governing the supervision of mergers in the EU banking sector.  Sarah’s research examines the horizontal relationship between banking supervision and merger control, as well as the vertical allocation of competences between national and Union bodies in the EU’s multi-level administrative framework.

Mergers in the EU banking sector remain a source of tension between national and EU-level interests as regards the structure of the banking sector in the EU’s single market. Notably, this has become visible with regard to the Italian bank UniCredit’s interest in the German Commerzbank, and government and Commission interventions in relation to domestic mergers in Italy and Spain. Member States may seek to preserve (certain) ‘domestic’ banks as pillars of their national financial system, whereas the EU is promoting market integration, consolidation and the creation of EU champions.

These tensions have shone a spotlight on the scope and relationship between the two principal pillars of administrative oversight for bank mergers: merger control and banking supervision. Each pillar is founded on distinct public-interest rationales and risk logics. Banking supervision addresses prudential concerns such as financial stability, depositor and investor protection, and market integrity, whereas merger control assesses whether a merger would significantly impede effective competition by altering market structure.

Because a single transaction may generate both prudential and competition risks, it can trigger parallel procedures at national and/or EU level. While the two pillars are conceptually distinct, their practical application within a multi-level administrative order raises questions of potential overlaps, coherence and coordination. In addition, national interventions both within and outside these procedures raise questions of competence, conformity with EU law, and the predictability of administrative decision-making for the affected market participants. 

About the speaker: Sarah is a fellow and doctoral candidate within the DFG Research Group “Dynamic Integration” at Humboldt-University Berlin. She studied law in Berlin, Paris and London and has worked as a research and teaching assistant at King’s College London, the European University Institute in Florence and in the financial services regulatory group of a law firm in Berlin.