National watchdogs will find it harder to block cross-border takeovers in the financial sector under new rules adopted today by European Union finance ministers seeking to curb protectionism.
The revised EU banking rules will allow regulators to block a banking or insurance merger on more specific grounds, rather than using the currently broad criteria of "prudential" risk.
"We felt there were a number of obstacles being put forth by national supervisors," EU Internal Market Commissioner Charlie McCreevy told reporters after ministers backed the change.
He has previously launched legal action against Italy and Poland for interfering in cross-border banking mergers.
"The clarity of this directive will help ensure there is an unhindered way of doing business in acquisitions in the financial sector," Mr McCreevy said.
The new rules are expected to become effective around the end of 2008 or early 2009.
They will allow regulators to block financial takeovers based on: the reputation of the proposed acquirer; the reputation and experience of any person that may run the merged company; the financial soundness of the proposed buyer; ongoing compliance with EU rules; and the level of risk of money laundering and terrorist financing.