The President of the European Central Bank (ECB) Mario Draghi gives a press conference following the meeting of the Governing Council of the European Central Bank in Riga, Latvia, June 14, 2018. The euro fell against the dollar after the European Central Bank said it expected interest rates to remain at their current record lows until well into 2019. / AFP / afp / Ilmars ZNOTINS
The President of the European Central Bank (ECB) Mario Draghi. \Time is running out for the EBC and European lenders to get agreement on new cross-border mergers regulations. Ilmars Znotins/AFP

ECB and European banks under pressure on cross-border mergers push



The European Central Bank and the lenders it oversees are running out of time in their push for rules to foster cross-border mergers.

European Union regulations need to change so consolidation makes financial sense, the ECB and firms say. But their shared urgency has been stymied by politicians from Germany and smaller states who want to make sure closer ties don’t expose them to excessive risks from other countries.

Euro-area leaders meet at the end of this month to discuss further integration of the currency zone, including the so-called banking union intended to remove barriers to expansion. They’re unlikely to make progress on crucial elements of the plan, including a common deposit insurance system. And they won’t have many more chances to hammer out a deal before next spring, when EU elections and a changing of the guard in Brussels mean lawmaking grinds to a halt until the end of the year.

“Banking union is not in place, and there are not yet enough benefits for banks to consider merging,” said Pauline Lambert, a bank analyst at Scope Ratings. While some steps have been taken, thorny issues like deposit protection need to be tackled. “I am not sure there will be real progress on this front at the summit,” she said.

For now, CEOs from Societe Generale to Deutsche Bank are lining up to pour cold water on deals. Mergers and acquisitions in the euro area have declined since the crisis, and in 2016 reached their lowest level since 2000, Daniele Nouy, head of supervision at the ECB, said last September. And the mergers that happen are domestic, not cross-border.

Banks need a “revenue incentive” to consider tie-ups with firms in other euro-area countries, said Jernej Omahen, an analyst at Goldman Sachs. To do that, “you allow a bank to source deposits in where they’re cheap,” such as Germany, and “lend them out where asset rates are more attractive, such as Madrid or Milan. And for that to happen, we need a complete banking union.”

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Read more:

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The EU’s banking-union project, which dates back to 2012, is an attempt to level the playing field in the bloc’s financial markets and avert future crises. It consists of the Union’s rule book, centralised supervision by the ECB and a bank-failure authority, the Single Resolution Board.

The planned common deposit insurance system remains on paper largely because of opposition from Germany, which insists on first making further progress in removing risk from the system, for example by tackling the mountain of non-performing loans on banks’ balance sheets in countries like Greece and Italy.

With mergers slowed to a trickle, banks have also cut cross-border lending. A big part of the problem is that member states are hesitant to scrap limits on banks moving cash and reserves between units. The ability to use capital and liquidity either side of a border would make mergers more attractive for banks, says Guntram Wolff, director of Bruegel, a Brussels-based think tank.

The ECB is trying to reduce such ring-fencing, “but there is still a lot of resistance from member states, probably in part because deposits are guaranteed at the national level,” he said.

The European Commission, the EU’s executive arm, proposed making this easier by allowing supervisors to waive requirements for a banking group’s subsidiaries to comply with their own capital and liquidity requirements. The proposal was part of a raft of banking legislation under consideration by EU member states and the European Parliament.

The commission’s idea was shot down by finance ministers as they staked out their position on the bills. It also faces skepticism in the European Parliament, which plans to vote on its stance on Tuesday.

Another factor that might influence bankers contemplating expansion in another country is the political uncertainty in countries such as Italy and Spain. When politicians in core euro-area countries raise the possibility of abandoning the common currency, it can be hard to contemplate cross-border mergers.

“Tackling ring-fencing will not be enough in the end if you feel that Italy might drop out of the euro,” Mr Wolff said. “This is still one of the main reasons why it’s so hard for big financial institutions to integrate across several countries.”

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The specs

Engine: 3.0 twin-turbo inline six-cylinder
Transmission: eight-speed
Power: 503hp
Torque: 600Nm
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The specs

Engine: Single front-axle electric motor
Power: 218hp
Torque: 330Nm
Transmission: Single-speed automatic
Max touring range: 402km (claimed)
Price: From Dh215,000 (estimate)
On sale: September

Reading List

Practitioners of mindful eating recommend the following books to get you started:

Savor: Mindful Eating, Mindful Life by Thich Nhat Hanh and Dr Lilian Cheung

How to Eat by Thich Nhat Hanh

The Mindful Diet by Dr Ruth Wolever

Mindful Eating by Dr Jan Bays

How to Raise a Mindful Eaterby Maryann Jacobsen

ROUTE TO TITLE

Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2

Points about the fast fashion industry Celine Hajjar wants everyone to know
  • Fast fashion is responsible for up to 10 per cent of global carbon emissions
  • Fast fashion is responsible for 24 per cent of the world's insecticides
  • Synthetic fibres that make up the average garment can take hundreds of years to biodegrade
  • Fast fashion labour workers make 80 per cent less than the required salary to live
  • 27 million fast fashion workers worldwide suffer from work-related illnesses and diseases
  • Hundreds of thousands of fast fashion labourers work without rights or protection and 80 per cent of them are women
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Engine: 6.2-litre supercharged V8

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World Cricket League Division 2

In Windhoek, Namibia - Top two teams qualify for the World Cup Qualifier in Zimbabwe, which starts on March 4.

UAE fixtures

Thursday, February 8 v Kenya; Friday, February 9 v Canada; Sunday, February 11 v Nepal; Monday, February 12 v Oman; Wednesday, February 14 v Namibia; Thursday, February 15 final

MATCH INFO

Euro 2020 qualifier

Fixture: Liechtenstein v Italy, Tuesday, 10.45pm (UAE)

TV: Match is shown on BeIN Sports

Dr Amal Khalid Alias revealed a recent case of a woman with daughters, who specifically wanted a boy.

A semen analysis of the father showed abnormal sperm so the couple required IVF.

Out of 21 eggs collected, six were unused leaving 15 suitable for IVF.

A specific procedure was used, called intracytoplasmic sperm injection where a single sperm cell is inserted into the egg.

On day three of the process, 14 embryos were biopsied for gender selection.

The next day, a pre-implantation genetic report revealed four normal male embryos, three female and seven abnormal samples.

Day five of the treatment saw two male embryos transferred to the patient.

The woman recorded a positive pregnancy test two weeks later. 

Lowest Test scores

26 - New Zealand v England at Auckland, March 1955

30 - South Africa v England at Port Elizabeth, Feb 1896

30 - South Africa v England at Birmingham, June 1924

35 - South Africa v England at Cape Town, April 1899

36 - South Africa v Australia at Melbourne, Feb. 1932

36 - Australia v England at Birmingham, May 1902

36 - India v Australia at Adelaide, Dec. 2020

38 - Ireland v England at Lord's, July 2019

42 - New Zealand v Australia in Wellington, March 1946

42 - Australia v England in Sydney, Feb. 1888

Visit Abu Dhabi culinary team's top Emirati restaurants in Abu Dhabi

Yadoo’s House Restaurant+& Cafe

For the karak and Yoodo's house platter with includes eggs, balaleet, khamir and chebab bread.

Golden Dallah

For the cappuccino, luqaimat and aseeda.

Al Mrzab Restaurant

For the shrimp murabian and Kuwaiti options including Kuwaiti machboos with kebab and spicy sauce.

Al Derwaza

For the fish hubul, regag bread, biryani and special seafood soup. 

Director: Nag Ashwin

Starring: Prabhas, Saswata Chatterjee, Deepika Padukone, Amitabh Bachchan, Shobhana

Rating: ★★★★

Company profile

Company name: Hayvn
Started: 2018
Founders: Christopher Flinos, Ahmed Ismail
Based: Abu Dhabi, UAE
Sector: financial
Initial investment: undisclosed
Size: 44 employees
Investment stage: series B in the second half of 2023
Investors: Hilbert Capital, Red Acre Ventures

EMIRATES'S REVISED A350 DEPLOYMENT SCHEDULE

Edinburgh: November 4 (unchanged)

Bahrain: November 15 (from September 15); second daily service from January 1

Kuwait: November 15 (from September 16)

Mumbai: January 1 (from October 27)

Ahmedabad: January 1 (from October 27)

Colombo: January 2 (from January 1)

Muscat: March 1 (from December 1)

Lyon: March 1 (from December 1)

Bologna: March 1 (from December 1)

Source: Emirates

Turning waste into fuel

Average amount of biofuel produced at DIC factory every month: Approximately 106,000 litres

Amount of biofuel produced from 1 litre of used cooking oil: 920ml (92%)

Time required for one full cycle of production from used cooking oil to biofuel: One day

Energy requirements for one cycle of production from 1,000 litres of used cooking oil:
▪ Electricity - 1.1904 units
▪ Water- 31 litres
▪ Diesel – 26.275 litres

Champions League Last 16

Red Bull Salzburg (AUT) v Bayern Munich (GER)

Sporting Lisbon (POR) v Manchester City (ENG)

Benfica (POR) v Ajax (NED)

Chelsea (ENG) v Lille (FRA)

Atletico Madrid (ESP) v Manchester United (ENG)

Villarreal (ESP) v Juventus (ITA)

Inter Milan (ITA) v Liverpool (ENG)

Paris Saint-Germain v Real Madrid (ESP)

360Vuz PROFILE

Date started: January 2017
Founder: Khaled Zaatarah 
Based: Dubai and Los Angeles
Sector: Technology 
Size: 21 employees
Funding: $7 million 
Investors: Shorooq Partners, KBW Ventures, Vision Ventures, Hala Ventures, 500Startups, Plug and Play, Magnus Olsson, Samih Toukan, Jonathan Labin

I Care A Lot

Directed by: J Blakeson

Starring: Rosamund Pike, Peter Dinklage

3/5 stars

COMPANY PROFILE

Company name: The Cloud

Started: 2018

Founders: George Karam and Kamil Rogalinski

Based: Hub71, Abu Dhabi, UAE

Industry: Food technology

Funding size: $10m+

Investors: Middle East Venture Partners, Olayan Financing, Rua Growth Fund

UAE athletes heading to Paris 2024

Equestrian

Abdullah Humaid Al Muhairi, Abdullah Al Marri, Omar Al Marzooqi, Salem Al Suwaidi, and Ali Al Karbi (four to be selected).

Judo
Men: Narmandakh Bayanmunkh (66kg), Nugzari Tatalashvili (81kg), Aram Grigorian (90kg), Dzhafar Kostoev (100kg), Magomedomar Magomedomarov (+100kg); women's Khorloodoi Bishrelt (52kg).

Cycling
Safia Al Sayegh (women's road race).

Swimming

Men: Yousef Rashid Al Matroushi (100m freestyle); women: Maha Abdullah Al Shehi (200m freestyle).

Athletics

Maryam Mohammed Al Farsi (women's 100 metres).

HEY MERCEDES, WHAT CAN YOU DO FOR ME?

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SPECS

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Power: 630hp
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