The European banking sector fight behind DTAs

Red gloves

Competition authorities in Brussels authorised a letter to be sent to each Member State requesting information following requests from some MEPs and other parties about state guarantees on such assets.

However, as a senior banking official pointed out to The Corner, “the discussions into the European Parliament about DTAs go back to two or three years ago. We have heard some bitter comments or small bombshells in the last weeks related to the capital levels of Greek banks.”

Deferred tax assets could represent around 30 to 40 per cent of the core tier 1 capital in main Greek lenders.

The same banking official denied that there were fears over capital levels in Spain, Portugal or Italy but raised other questions instead.

 “After the stress tests, Italian banks wanted to buy some German institutions and other German lenders reacted by raising questions on how DTAs rules work,” the financial executive concluded.

Another banking source confirmed that “the investigation took the EU banking sector by surprise. If proven that DTAs were state aid, it would mean a harsh resolution from Brussels.”

Legislators and the Economic Committee Secretary have admitted to The Corner that they doubt the investigation was launched due to MEP concerns.

“The co-legislators set rules on DTAs in the Capital Requirements Regulation adopted in 2013,” the Secretariat explained. The committee coordinator said “the issue of DTA in relation to the ongoing Commission assessment has not yet been discussed in the banking union working group.”

This view is shared by Fabio Di Masi, member of the ECON Committee. Pablo Zalba, another legislator, confirmed:

 “I do not know if any MEPs have shown their doubts.”

Asked about the origins of the investigation, a EU official said that “MPEs are not the only actors asking for information about DTAs and their fiscal legislative framework.”

A follow-up question wondering if the other incumbent were European banks was answered the same way.

“Legislators are not the only ones asking.”

About the Author

Alexandre Mato
Alexandre Mato covers European affairs from Brussels. Former Editor in-chief of Cierre de Mercados, he was the first ever editor on Spanish TV appointed under the age of 30. He has a degree in Journalism and a postgraduate in International Relations, both from Universidad Complutense de Madrid.

Be the first to comment on "The European banking sector fight behind DTAs"

Leave a comment