Why euro zone banks don’t yet buy into cross-border mergers

MILAN, June 19 (Reuters) – EU policymakers have renewed calls for cross-border bank mergers as they look to address the multi-trillion euro investments needed to finance the bloc’s green and digital transformation.

A plan for a fully-fledged banking union, opens new tab has stalled and bankers and supervisors point to the absence of a joint guarantee system for euro zone depositors as the biggest impediment to its progress.

Below is an explanation of why little-understood banking rules and the lack of a European deposit insurance scheme (EDIS) make cross-border takeovers a tall order for European bankers, who routinely complain of excessive hurdles.