Problems of Cross Border Listing and the Way Forward
Background Paper:
Obstacles to cross-border listings and acquisitions in the financial sector
A. Purpose of the paper
In September 2004, the informal Ecofin Council in Scheveningen discussed the issue of lagging crossborder consolidation1 in the banking area. This low level of cross-border consolidation is not confined to banking, but is relevant for the whole financial sector, with some nuances. In the upcoming Financial
Integration Monitor report, the Commission will dedicate a chapter on the quantitative aspects of crossborder restructuring, confirming the trends discussed in Scheveningen. Indeed, between 1999 and
2004, the report will show that cross-border mergers and acquisitions (M&As) accounted for around
20% of the total value of M&As in the financial sector, whereas cross-border deals represented 45% of
M&As in other sectors over the same period.2
Finance Ministers asked the Commission to examine possible explanations for this low level of pan-
European restructuring specific to the financial sector, by reviewing the obstacles to cross-border M&As, in order to identify possible internal market failures, gaps or shortcomings.
It should be stressed that the role of the Commission is to ensure that existing EU law is enforced properly, as well as to propose growth-supportive actions, within the context of the overall EU competitiveness policy. It must be equally clear that the Commission does not intent to favour specific business models or to influence individual market decisions, as long as they are compatible with the
Treaty rules and the EU secondary law. On that basis, it is the role of the Commission to analyse market functioning, in order to detect any unjustified obstacles that would hamper companies in making their own decisions regarding their business organisation in the Internal Market.
The misuse of the supervisory powers to block cross-border mergers has been identified by Ministers of
Finance as a possible obstacle to
Obstacles to cross-border listings and acquisitions in the financial sector
A. Purpose of the paper
In September 2004, the informal Ecofin Council in Scheveningen discussed the issue of lagging crossborder consolidation1 in the banking area. This low level of cross-border consolidation is not confined to banking, but is relevant for the whole financial sector, with some nuances. In the upcoming Financial
Integration Monitor report, the Commission will dedicate a chapter on the quantitative aspects of crossborder restructuring, confirming the trends discussed in Scheveningen. Indeed, between 1999 and
2004, the report will show that cross-border mergers and acquisitions (M&As) accounted for around
20% of the total value of M&As in the financial sector, whereas cross-border deals represented 45% of
M&As in other sectors over the same period.2
Finance Ministers asked the Commission to examine possible explanations for this low level of pan-
European restructuring specific to the financial sector, by reviewing the obstacles to cross-border M&As, in order to identify possible internal market failures, gaps or shortcomings.
It should be stressed that the role of the Commission is to ensure that existing EU law is enforced properly, as well as to propose growth-supportive actions, within the context of the overall EU competitiveness policy. It must be equally clear that the Commission does not intent to favour specific business models or to influence individual market decisions, as long as they are compatible with the
Treaty rules and the EU secondary law. On that basis, it is the role of the Commission to analyse market functioning, in order to detect any unjustified obstacles that would hamper companies in making their own decisions regarding their business organisation in the Internal Market.
The misuse of the supervisory powers to block cross-border mergers has been identified by Ministers of
Finance as a possible obstacle to