The European Commission will give greater weight to “innovation, investment and resilience of the internal market”, when deciding whether to sign off on deals, according to draft guidelines seen by the FT. If adopted by the Commission, the new policy approach would reflect a broader change in the political mood across the continent, with calls to enable more “European champions” to take on corporate giants in the US and China.

Commenting, Hyder Jumabhoy, Partner at international law firm White & Case LLP and Global Co-head of its Financial Institutions Industry Group and EMEA Co-head of its Financial Services M&A practice, said: “This would represent an important move to support the advancement of one or more pan-European banking champions, gravitating towards enhancing the competitiveness of EU lenders on the international stage.

“This development is particularly timely for the European banking sector, where consolidation is high on the agenda for many EU bank boards, in part driven by many of these lenders being finally free from the shackles of government ownership in place since the global financial crisis. Many of these lenders also have robust M&A appetite, with the Europe’s top 20 banks having accumulated approximately US$600 billion in excess capital over the last 3 years.

“If merger rules are relaxed, we expect to see transformational M&A accelerate.”