Brussels, 14 December 2005
Free movement of capital: Commission opens an infringement procedure against Italy on the issue of acquisition of stakes in domestic banks
The European Commission has decided to send Italy a formal request to submit its observations on provisions in its national regulatory framework that apply to supervisory decisions on the acquisition of stakes in domestic Italian banks by other EU banks. The provisions in question are the 1993 Banking Law and the 'Istruzioni di vigilanza per la banche', which further refer to Article 2359 Civil Code and a decision by an interministerial committee. The Commission is concerned that this framework may allow for the exercising of supervisory authority which lacks procedural transparency and can create legal uncertainty. This could therefore act as a disincentive to investment from other Member States in the Italian banking industry, in violation of EC Treaty rules on the free movement of capital (Article 56) and the right of establishment (Article 43). The Commission's request takes the form of a letter of formal notice, the first stage of infringement procedures under Article 226 of the EC Treaty.
Earlier this year, there were two attempted takeovers of Italian banks by other EU banks: one by Banco Bilbao Vizcaya Argentaria (BBVA) of Banca Nazionale del Lavoro (BNL), and another by ABN AMRO of Banca Antonveneta. This has drawn public attention to the way the Italian national supervisory authority deals with the acquisition of stakes in domestic banks by other EU banks.
There are established standards laid down by the European Court of Justice regarding legislative measures in authorisation procedures. Core to these standards is the principle that investors need to be given clear indication of the specific, objective circumstances in which prior approval will be granted or withheld. The Commission is concerned that the existing Italian regulatory framework applicable to supervisory decisions may not meet these standards: it may be insufficient insofar as its structure may allow for an exercise of supervisory authority which lacks procedural transparency and can create legal uncertainty. The Commission is also concerned that the existing Italian regulatory framework may lack specified criteria used for the appreciation of prudential acceptability, in particular with respect to the notion of "control". This could lead to a situation in which the supervisory authority can refuse authorisation based on opaque concerns, e.g. regarding "stability of governance".
The Commission considers that the Italian authorisation provisions applied by the supervisory authority for the acquisition of stakes in domestic banks by other EU banks may thus be incompatible with the freedom of capital movements and the right of establishment of foreign EU investors trying to acquire domestic banks (Articles 56 and 43 of the EC Treaty respectively).
As highlighted in the recent Communication from the Commission on intra-EU
investment in the financial services sector, Member States must both respect the
basic freedoms guaranteed by the EC Treaty and ensure compliance with the
relevant Directive when legislating, creating or enforcing administrative
practices. This particular case concerns the primary Treaty framework applicable
to the exercising of supervisory authority but not the Banking Directive