Financial Services Groups Under EU Law

Conceptually, consolidated supervision essentially reflects the fundamental approach to regulating financial services groups not quite as a single entity in the legal sense, but still as a single economic unit, whose components are tied together by financial and commercial links and whose stability and soundness, therefore, can only be managed and assessed on an aggregate basis. In other words, EU banking regulation treats groups not just as networks, where the dominant shareholder exercises his influence over individual companies whose legal and economic independence is to be protected in the interests of creditors and minority shareholders, but as something substantially more than that. In a way financial regulation is thus closer to economic reality than the traditional approach taken by many national group laws, including the German approach – and it is much closer to the perception of counterparties and markets, which are used to treating groups as a single player and not as a composite of individual entities.(33)…