Major acquisitions: No steps have been taken in response to the FSAP recommendation in
The German authorities believe that they would overstep their role as supervisors if
they formally vet and give prior approval for major acquisitions proposed by banks;
therefore, no changes to the German Banking Act have been made to address this issue. In
light of CRD IV, the authorities do expect to continue to review compliance with legal
thresholds for qualifying holdings and acquisitions made by banks.
German supervisors do not use a formal prior approval process for major acquisitions.
However, the authorities note that institutions are expected to prepare a strategic plan (prior
to the acquisition of, or merger with, any other enterprise) setting out the objectives, the main
implications for risk management, and the material impact on the overall risk profile of the
institution or group.
The authorities also point out that supervisors are in close contact with
supervised (especially larger) banks, so they are normally aware in good time about material
events such as a major acquisition. On the other hand, however, there is no formal
requirement for banks to share their strategic plans with the authorities or indeed to seek the
authorities’ views on these plans.
As a result, there remains a risk that supervisors will be
informed too late about a major acquisition or will not be prompted to assess its impact on the
risk profile of the bank and take any necessary action at a sufficiently early stage.