Jain Says ECB Supervision Clearing Way for Bank Mergers

The European Central Bank assuming supervision of the euro area’s biggest lenders paves the way for mergers and acquisitions within the industry, Deutsche Bank AG co-Chief Executive Officer Anshu Jain said.

The Single Supervisory Mechanism “allows European banks to be compared to each other,” restoring confidence among firms, while helping encourage lending, he said at an economic forum hosted by Die Zeit newspaper in Hamburg today. It creates the “pre-conditions finally for banking consolidation,” he said.

The ECB took charge of the euro area’s 120 biggest institutions on Nov. 4 after the results of a yearlong asset review revealed that soured loans now amount to almost 900 billion euros ($1.1 trillion). Twenty-five lenders including Banca Monte dei Paschi di Siena SpA failed a stress test.

None of the largest lenders in Germany, including Deutsche Bank, France and Spain were found lacking capital.

Jain said national bank watchdogs including Germany’s Bundesbank and Bafin had been “very, very tough” but “fair regulators.” They did “a very good job,” he added.

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