The Impact of the Eurozone Crisis and its Regulation on the Decrease of European Bank Mergers

  • Abstract:

    The paper shall begin with covering the main incentives of banks to engage in Mergers and Acquisitions. It will shortly present the current European Bank Union situation, with its goals and future agenda. Following that, the legal framework of the supervision of Bank M&As will be covered. Having analyzed the incentives of banks to merge, the past five years of the European Banking Union history and the current trends of the bank mergers, two relevant questions arise and shall be answered in this discussion. Firstly, it is not clear which shall be considered the appropriate monitoring authority of a European Bank Merger from an efficiency point of view. Secondly, it is crucial to understand the underlying reasons of the failing of the European bank mergers and their potential relation to the regulatory strategies of the monitoring authorities. In order to approach the first research question a debate on the efficiency between the Central Bank of Europe and the European Commission shall take place in order to compare the duties, tasks, competences and toolboxes of both the European Commission and the European Central Bank when it comes to assess a domestic or cross-border bank merger. For the second question, I shall present an attempt of two Greek banking institutions to merge and the reasons why the agreement fail through in the end. Other stories of failed or non-executed European bank mergers will be shortly mentioned. As a consequence, we will be able to infer the general reasons why European bank mergers fail by remaining few and apprehend if this phenomenon it to be attributed to the inefficiency of the Merger Monitoring Authorities.