The head of the European Central Bank seemed sympathetic to the possible intentions of the Italian UniCredit to take over the German Commerzbank.
President of the European Central Bank Christine Lagarde Europe needs “bigger and stronger” banks to be able to compete with the US and China.
Lagarde spoke about the matter when she was heard by the European Parliament in Brussels.
Lagarde’s comments come amid recent moves by Italy’s UniCredit bank, which suggest it is considering a takeover of Germany’s Commerzbank.
If UniCredit took over Commerzbank, the company would become one of Europe’s largest banks.
UniCredit’s potential takeover attempt has raised eyebrows in both Italy and Germany.
The Italian government fears that UniCredit will move its headquarters to Germany with the takeover, which would reduce Italy’s tax collection.
The German state, on the other hand, is Commerzbank’s largest owner. Unicredit did not approach the German parties until it unexpectedly bought a 9 percent stake in Commerzbank, which has received the chancellor By Olaf Scholz to call the bank’s actions “hostile”.
The ECB’s Lagarde, on the other hand, would like Europe’s fragmented banking sector to unite so that the big players could support European companies with more money and compete against US money.
Source: Reuters