Brussels, 24 January 2007
Free movement of capital: Commission closes infringement procedure against Italy concerning acquisition of stakes in domestic banks
The European Commission has decided to close an infringement procedure against Italy concerning prudential supervision of the acquisition of stakes in domestic banks. The Commission will continue to monitor the financial services sector to eliminate any possible obstacles to the free movement of capital not justifiable on prudential supervision grounds that could hinder cross-border consolidation in the EU financial sector. Where the Commission identifies breaches of EU law in relation to direct investment by EU financial institutions, it will, where a violation has been identified, pursue infringement cases vigorously, as it has already done in other areas of barriers to intra-EU direct investment.
The decision to close the case follows Italy's amendments to its national regulatory framework applicable to supervisory decisions on the acquisition of stakes in domestic Italian banks by other EU banks. This was in response to the Commission's formal request to Italy to submit its observations on its national regulatory framework as part of the first phase of infringement procedures under Article 226 of the EC Treaty (see IP/05/1595).
The Commission had initially been concerned that the national regulatory framework in question may allow for the exercise of supervisory authority in a way 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 European Court of Justice has established standards 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. As
highlighted in the Commission's 2005 Communication 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 relevant Directives when
legislating, creating or enforcing administrative practices.