March 21, 2019 / 11:03 AM / 4 months ago

ECB's Enria says merged banking giant must have extra capital, be 'resolvable'

FILE PHOTO: Chairperson of European Banking Authority (EBA) Andrea Enria attends a debate with the European Parliament's Economic and Monetary Affairs Committee in Brussels, Belgium September 26, 2016. REUTERS/Yves Herman

FRANKFURT (Reuters) - A new banking giant resulting from a merger must have extra capital and a legal structure that allows authorities to wind it down if it fails, the European Central Bank’s top watchdog said on Thursday.

“If a bank becomes too big, complex or interconnected... it needs to have additional capital,” Andrea Enria said when asked in the European Parliament about a possible tie-up between Germany’s Deutsche Bank and Commerzbank.

“Even if you become big you should be resolvable so the banks should prove that they have structures that are not preventing a smooth resolution in case of crisis,” he added.

“These are the two main safeguards that you need to look at when you look at mergers,” Enria said.

Reporting By Francesco Canepa

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