Today’s need-to-know storiesBrussels warns Italy and Spain over obstruction of bank mergers
The European Commission has stepped up its criticism of the Italian and Spanish governments for obstructing banking mergers.
According to a report from the Financial Times on Sunday, several commission officials confirmed that warnings to both governments were connected, and part of broader efforts to encourage banking consolidation within the bloc by reducing political interference.
In two separate actions last week, the commission argued that political interference undermines efforts to strengthen Europe’s financial system and improve economic resilience.
On Monday, the commission privately informed Giorgia Meloni’s government that it had reached a preliminary conclusion that Italy breached EU merger rules by using so-called “golden power” rules to hinder UniCredit’s €10bn takeover bid for Banco BPM.
By Thursday, Spain had received a “formal notice” over its move to block a merger between BBVA and Banco Sabadell for up to three years, with Brussels demanding that Madrid review its decision and change laws that give the government power to intervene in banking deals.
“The problem is that this is pure political posturing and the rules are clear and governments have no formal power to prevent these mergers from happening,” one senior EU official told the FT.
“The question here is who are you really competing with . . . our competitors are not inside the EU, they are outside the EU.”
Beijing pledges response to EU sanctions on Chinese banks
Beijing has strongly condemned an EU decision to sanction two Chinese banks, calling on Brussels to “immediately cease its wrong practice” while pledging a response aimed at defending the interests of Chinese companies.
Heilongjiang Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank were sanctioned by the EU on Friday as part of a broader package of measures targeting Russia in response to its invasion of Ukraine.
“China expresses strong dissatisfaction and resolute opposition to this move,” the Ministry of Commerce said in a statement on Monday, adding that the country will “take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies and financial institutions”.
The dispute comes just days before a summit in Beijing on Thursday, where Ursula von der Leyen, president of the European Commission and António Costa, president of the European Council are scheduled to meet Chinese President Xi Jinping and Premier Li Qiang.
Discussions are expected to centre on trade, security and the wider geopolitical impact of the Russia-Ukraine conflict.
HSBC restarts hunt for new board chair after search stalls
HSBC has restarted its hunt for a new board chair after failing to compile a satisfactory shortlist of candidates to succeed Mark Tucker, according to a Financial Times report published on Saturday.
The bank has reportedly considered over 100 individuals, but many top prospects were either unavailable or declined the role when approached.
HSBC has considered a range of senior executives for the role, including Zurich Insurance Group chief executive Mario Greco, Goldman Sachs executives Kevin Sneader and Richard Gnodde, and Bruce Carnegie-Brown, the former chair of the Lloyd’s of London insurance market, the FT reported.
Tucker, who has led the board since 2017, announced earlier this year he would step down by the end of 2025.
However, the timeline accelerated after he unexpectedly informed fellow directors he would leave in September to become non-executive chair of Asian insurer AIA Group.
A bank spokesperson said the search for a new chair is ongoing and confirmed that Brendan Nelson, who leads HSBC’s audit committee, will assume the role of interim chair from October 1.
China says detained Wells Fargo banker involved in a criminal case
China’s foreign ministry said on Monday that Chenyue Mao, the Wells Fargo banker barred from leaving the country, is involved in a criminal case and must co-operate with ongoing investigations.
“Everyone in China, whether they are Chinese or foreigners, must abide by Chinese laws,” ministry spokesperson Guo Jiakun said during a press briefing, in comments reported by Reuters.
Mao, a US citizen and managing director at Wells Fargo in Atlanta, was placed under the exit ban after entering China in recent weeks.
Following the ban, Wells Fargo suspended all employee travel to the country, a person familiar with the matter told Reuters last week.