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ECB to maintain supervision of Crédit Mutuel Arkéa after EU court rejects appeal

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ECB to maintain supervision of Crédit Mutuel Arkéa after EU court rejects appeal

The ECB will continue to supervise Crédit Mutuel Arkéa SACC, which is part of the Crédit Mutuel Group network, after the General Court of the European Union dismissed the French lender's objection to the central bank overseeing it through Confédération Nationale du Crédit Mutuel.

Crédit Mutuel Arkéa, which is seeking financial independence, appealed to the General Court that the ECB could not supervise Crédit Mutuel Arkea through the CNCM on the grounds that the CNCM is not a credit institution, that there is no Crédit Mutuel Group as defined by the applicable rules and that the central bank could not require Crédit Mutuel Arkéa to have additional equity capital.

However, the court rejected all three claims, saying the ECB could supervise groups whose affiliated institutions have consolidated accounts and require such groups to meet liquidity and solvency requirements regardless of whether or not the central body of that group has credit institution status.

The court also found that Crédit Mutuel Arkea, through the CNCM, meets all the conditions to be categorized as a "group," and that the ECB was not unjustified in requiring Crédit Mutuel Arkéa to hold additional capital based on the potential negative effects of its leaving the Crédit Mutuel Group.

Crédit Mutuel Arkéa said it would contest the interpretation of the European law and would file an appeal, Reuters reported Dec. 13.