ECB hopes for more consolidation of cross-border banks By Reuters

FRANKFURT (Reuters) – The European Central Bank hopes for more cross-border banking consolidation to improve credit rating and efficiency in the sector, ECB Vice President Luis de Guindos told Portugal’s Expresso in an interview.

UniCredit, Italy’s second-biggest bank, took a 9% stake in Commerzbank (ETR: ) last week, catching German authorities off guard and receiving a hostile reception from local management keen to avoid any takeover attempt .

It will now be up to the ECB to decide whether to allow UniCredit to increase its stake. De Guindos’ comments can be considered encouraging for UniCredit, even if the decision will rest with the ECB’s supervisory arm.

“Cross-border consolidation is important and we hope it will continue to make progress in the short term,” Guindos was quoted as saying by Expresso on Friday.

He said the lower ratings of European banks compared to the United States were a reflection of inefficiencies in the euro zone, such as national approaches and the lack of full integration of the bloc’s banking system.

“Because of this, investors see US banks as having a higher intrinsic value than European banks,” added de Guindos.

On monetary policy, de Guindos said the ECB would have better information in December to call for a possible interest rate cut, but kept the door open to a potential move in October.

“It is true to say that in December, we will have more information than in October,” de Guindos said. “We’ll have more information and another round of projections. But, you know, we’ve left the door wide open. We want to maintain our optionality.”

Markets have fully priced in a decline in December, but investors also see a chance for a move in October as well, given weaker growth.