The European banking sector: preparing for consolidation

Speakers:
Andreas Dombret (Columbia University, former Member of the Board of Deutsche Bundesbank)
Dominique Laboureix (French Prudential Supervisory Authority - Autorité de Contrôle Prudentiel et de Résolution - ACPR)
Luigi de Vecchi (Chairman EMEA Banking - Capital Markets & Advisory Citi)
Chair: Elena Carletti (Bocconi University)
Recording of the event held on Thursday, 8 April 2021.
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Consolidation has often been described as critical instrument to address the woes of Europe’s banking sector. Consolidation may entail diverse benefits for banks’ profitability, address overcapacity, foster private risk-sharing. However, the effects of consolidation on banks’ sound risk management and its broader impact on the stability of the financial system are uncertain. Some guidance and supervisory expectations have been developed in European prudential supervision (e.g. setting of capital requirements, the treatment of badwill, and the use of internal models by the newly consolidated entities). In this regard, the role of bank board members is key in understanding and addressing both opportunities and challenges raised by consolidation projects placed under their scrutiny.
This online debate will ask:
What are the opportunities and risks in the consolidation of the European banking sector?
How can consolidation contribute to the key objectives of the Banking Union?
Is consolidation the solution to address some of the core challenges faced by banks and their boards, i.e. low profitability and non-performing assets?
What are the main elements that bank board members should pay attention to when preparing for consolidation?
What are the factors of success for a consolidation through a merger and acquisition operation (including cross-border M&A)?
What is the role of independent board members in ensuring sustainable consolidation projects?
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The views and opinions expressed in this video are those of the speakers or authors in their personal capacity and do not necessarily reflect the official position of the Robert Schuman Centre or the European University Institute.