Germany’s financial regulator, BaFin, has cautioned against an excessive pursuit of consolidation and scale within the European banking sector Speaking to the “Handelsblatt” newspaper, BaFin President Mark Branson stated the regulator does not prioritize size as an end in itself, emphasizing that “bigger does not necessarily mean better” particularly from the perspective of customers or overall market competition
Branson highlighted the importance of diversity within the German financial industry, extending beyond just the banking sector itself He argued that maintaining a mix of large, medium-sized and smaller financial institutions fosters competition, ultimately benefiting consumers through lower service costs compared to more concentrated, oligopolistic markets
The comments come amidst increasing calls from the European Central Bank (ECB) and prominent banking figures – such as UniCredit CEO Andrea Orcel – for larger, more robust European banks capable of competing with financial institutions in the United States and China
UniCredit’s recent stake in Commerzbank has fueled speculation about potential further integration, with the possibility of UniCredit seeking a seat on Commerzbank’s supervisory board Branson indicated BaFin would scrutinize any such move, stating that the regulator comprehensively assesses potential conflicts of interest and their management when evaluating the suitability of supervisory board candidates