MADRID (Reuters) -The Spanish government plans to cede some powers related to banking supervision to the European Central Bank and the Bank of Spain, it said on Thursday, following EU criticism of its attempts to hinder BBVA’s bid for Sabadell.
An economy ministry spokesperson said the powers being ceded would include oversight of mergers and acquisitions.
The European Commission in July officially challenged Madrid’s attempts to hamper BBVA’s 16-billion-euro ($18.7 billion) hostile bid for smaller Spanish rival Sabadell, which opened an infringement procedure. The bid ultimately failed.
The Commission considered Madrid’s broad discretionary powers as unjustified restrictions on the freedom of capital movement.
Madrid maintains that its domestic regulations are fully aligned with those in Europe, and the spokesperson said the transfer of powers would not prevent state entities, such as Spain’s competition watchdog, from fulfilling their mandates.
The person said the transfer would take place when Spain adopts the EU’s new capital requirements directive, which has to be implemented by January 2026.
The Commission has now to decide whether Spain’s response is satisfactory. If it does not, it could ultimately refer Madrid to the EU’s highest court.
A Commission spokesperson confirmed receipt of Spain’s response and said the EU would analyse it before deciding on the next steps.
Under Spanish law, the government could not stop BBVA from buying Sabadell’s shares, but it had the final word at a later stage on whether a merger went ahead. Madrid said it needed to protect jobs and competition.
Ultimately, Sabadell shareholders tendered just 25.47% of voting rights, leading BBVA’s bid to fail earlier this month.
($1 = 0.8575 euros)
(Reporting by Jesús Aguado. Editing by Andrei Khalip, Aislinn Laing and Mark Potter)
