Response to consultation on Technical standards on prudentially material transactions under CRD

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Question 1. Do you agree with the methodology laid down in Article 1(2) on the determination of the materiality threshold?

NFU supports a resilient and competitive European banking sector, while stressing that consolidation is not neutral. A sustainable financial system depends on diversity, with large cross-border institutions coexisting alongside strong local and regional banks. Experience shows that mergers and centralisation can weaken local presence, reduce relationship-based banking, and undermine access to financial services in smaller communities, with implications for social cohesion and long-term customer outcomes. At the same time, consolidation can under certain conditions strengthen institutions and improve resilience. Capital markets often react positively in the short term to announcements of cost reductions, creating incentives that prioritise immediate shareholder returns over operational resilience. Such reactions should not be confused with proof of long-term stability. Competent authorities should therefore assess mergers beyond balance-sheet metrics, taking into account governance quality, workforce impacts, credibility of integration plans, operational capacity, and effects on local banking ecosystems. Robust procedures for information, consultation and social dialogue remain essential to ensure that consolidation contributes to financial stability, customer trust and a socially sustainable European banking sector.

We broadly agree with the methodology laid down in Article 1(2), as it provides a clear, objective, and prudentially grounded basis for determining materiality, anchored in eligible capital as defined in Regulation (EU) No 575/2013.

In particular, we welcome:

  • The requirement to assess materiality both individually and on a consolidated basis, ensuring that risk and systemic exposure are adequately captured.
  • The aggregation of transactions conducted within a twelve-month period, which reduces the risk of circumvention through transaction structuring.

However, from a workforce and longterm resilience perspective, we would encourage supervisors to complement the quantitative threshold with qualitative supervisory judgement, especially where acquisitions may have:

  • Significant implications for employment levels, skills concentration, or operational continuity;
  • A strategic impact on critical financial infrastructure or regional access to financial services.

Materiality in modern financial markets cannot be assessed solely through balance-sheet metrics; governance, operational resilience, and human capital considerations are increasingly decisive for systemic stability.

Generally, Implementing Technical Standards (ITS) should not introduce a governance model that is overly director‑ or supervisor‑centric. In particular, the regulatory framework should avoid positioning management as the primary interlocutor with supervisors while subjecting shareholder‑approved transactions to extensive supervisory evaluation of business strategy and organisational design. Such an approach risks weakening the practical role of the general meeting and shifting influence toward management narratives validated by supervisory authorities. In the Nordic governance model, the balance between shareholders, boards, management and particularly social partners is a central element of institutional stability. Supervisory implementation should therefore respect this architecture. 

Question 2. Do you consider that proportionality is well embedded in this Chapter 1, in particular regarding the list of information laid down for specific cases of material acquisitions referred to in Article 7(3)?

NFU welcomes that Article 7(3) nonetheless requires information on:

  • Strategic rationale and business model impact;
  • Prudential ratios and governance changes;
  • AML/CFT implications.

From a Nordic trade union perspective, this is essential. Even intra-group restructurings can have material consequences for employees, including relocations, centralisation of functions, changes in management accountability, and the integration of control functions. We therefore stress that proportionality should not mean lower scrutiny of governance or workforce impacts, but rather a focused and risk-based assessment that preserves transparency and social sustainability while avoiding unnecessary administrative burden. NFU underlines the importance of robust procedures for information, consultation and co-determination at all levels and across corporate structures. Mergers, acquisitions and consolidation should always be subject to systematic negotiation and dialogue with local trade unions.

Question 5. Do you consider that proportionality is sufficiently reflected in the threshold and cases covered by Article 24(2) and (3) as regards the requested set of reduced information and the related proportionate assessment set out in Articles 25 to 27?

NFU considers that Articles 24 to 27 provide a largely appropriate and well-calibrated proportionality framework, particularly through:

  • Clear asset-based thresholds for smaller mergers,
  • Reduced information requirements where prudential consolidation perimeters remain unchanged,
  • A structured and risk-based supervisory assessment under Articles 25–27.

We particularly welcome that proportionality is not automatic but embedded in supervisory judgement, taking into account:

  • Size, complexity, and systemic importance;
  • Robustness of forecasts;
  • Credibility of integration plans and governance arrangements.

From a trade union perspective, Articles 27’s emphasis on:

  • Integration of risk management and internal controls,
  • ICT systems and operational resilience,
  • Personnel resources and retention plans,

is especially important. Mergers frequently fail or create instability not because of capital shortfalls, but due to underestimated integration costs, loss of key staff, weakened internal controls, or overstretched or new IT systems.

We encourage competent authorities, when applying proportionality, to pay particular attention to:

  • Whether planned synergies rely on unrealistic workforce reductions,
  • Whether retention plans are credible in competitive labour markets,
  • Whether integration timelines adequately reflect operational and human constraints.

Such an approach supports not only prudential objectives but also the long-term viability and social legitimacy of consolidation in the EU financial sector. In conclusion, NFU supports the direction of the proposed framework and its emphasis on proportionality, risk-based supervision, and credibility of business plans. In the context of the broader review of EU Merger Guidelines, we underline that effective competition, financial stability, and social sustainability are mutually reinforcing objectives.

Name of the organization

Nordic Financial Unions (NFU)