ECB publishes Guide on supervisory approach to consolidation in the banking sector
Today, the European Central Bank (ECB) has published its final Guide on the supervisory approach to consolidation in the banking sector, clarifying the use of supervisory tools to facilitate sustainable consolidation projects.
Such projects must be based on a credible business and integration plan, improve the sustainability of the business model, and respect high standards of governance and risk management. The Guide clarifies that the ECB will not penalise credible integration plans with higher capital requirements, and that it expects profits from badwill to be used as capital of the combined bank.
Today’s publication follows a public consultation on the matter closed on 1 October 2020 and the subsequent ECB feedback sta