April 10, 2019 / 1:46 PM / a month ago

ECB's Draghi says European bank sector needs significant consolidation

FRANKFURT, April 10 (Reuters) - Europe’s banking sector is overcrowded and in significant need of consolidation, ECB President Mario Draghi said on Wednesday.

The sector needs to take a series of actions to improve its business model, he told a post-policy-meeting news conference.

“That can be achieved however only through consolidation.... (and) the need for consolidation is very, very significant,” he said.

“There is a relationship between scale and the capacity to undertake the investments that are needed to improve technology and be competitive, especially in certain business models.”

Asked about the European Central Bank’s supervisory role in mergers, he said the main priority was for transactions to be successful, meaning pleasing to shareholders and creating a strong business entity.

He also said the bank had no preference between cross-border and national banking mergers. (Writing by John Stonestreet; Editing by Hugh Lawson)

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