Italy considers modifying golden powers, plans to retain veto authority- report

The Italian government plans to change its financial supervision rules, while retaining its veto power over banking transactions, reported Bloomberg, citing people familiar with the matter.

This development follows a recent formal warning from the European Commission (EC) to the Italian government regarding its “golden powers” ​​legislation.

Italy’s “golden powers” allow the government to protect national interests in strategic sectors like defense and telecommunications, and these regulations have also been extended to the banking sector.

The EC had previously expressed concerns that Italian regulations on specific banking sector acquisitions may not align with EU law.

The warning stems from Brussels’ initiative to dissuade member states from blocking mergers and consolidations within the banking sector.

Italy is now considering relaxing some aspects of its supervisory regulations, but will retain its power to block mergers and acquisitions within the sector.

Among the changes the government is considering include limiting the geographic scope of laws on financial matters, some people told the publication.

Other possible changes could include changing the sectors regulated by authorities or adjusting the criteria for applying the rules.

The government is determined to maintain control over banking transactions, as banks and public savings are considered matters of national security, the sources said.

Italy’s use of its “golden power” regulation has received increased attention following its application to UniCredit’s bid to purchase Banco BPM.

UniCredit ultimately withdrew from the deal in July, highlighting the ambiguity surrounding how these special government powers would be applied.

The Italian government had made its approval conditional on UniCredit complying with a number of requirements, such as ceasing its activities in Russia.

The Italian government could introduce changes to its privileged powers, either through the budget currently under parliamentary debate, or through an autonomous decree.

The Italian government now has two months to respond to the Commission’s concerns and remedy the problems identified. If no resolution is found, the case could be taken to the Court of Justice of the EU.

“Italy considers changing its golden powers and plans to keep its veto power – report” was originally created and published by Retail Banker International, a brand owned by GlobalData.

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