ECB will not block credible bank mergers

The ECB (pic) also recommended that banks considering a tie-up engage with the central bank early on in order to allow for preliminary feedback.

BRUSSELS: The European Central Bank (ECB) said it won’t block the kind of bank mergers that could help Europe’s beleaguered industry, spelling out for the first time how it views possible deals.

Highlights of the watchdog’s announcement Wednesday include that merged banks don’t automatically face higher capital requirements, and that certain accounting gains should be used to make them safer rather than boost short-term shareholder returns.