Concern over the audit of retail banks and insurance companies could still delay the merger of Coopers & Lybrand and Price Waterhouse.
Several European competition authorities, including the British, French and Irish, are understood to be uncomfortable with the concentration of audits in the banking and insurance sectors. Their concerns are set to be voiced when the Advisory Committee, made up of all the national regulators, meets on 15 May.
But a spokesman for Karel van Miert, European competition commissioner, was not aware of any concerns. ‘The advisory committee can order us to send a statement of objections if the majority of member states is in favour of doing so, but it seems unlikely.’
One analyst claimed there is cause for concern. In the banking arena, PW audits Barclays and Lloyds TSB, while Coopers audits Royal Bank of Scotland and Abbey National. In France, the two firms audit insurance companies Group Ama, Axa, Caisse Centrale de Reassurance, Gan, Prevoir and MAAF.
But a PW spokesman said the EC had taken a global view. ‘On a small level there will always be apparent conflicts, and these territories are very important to us. But it’s a global deal and has to be considered as such.
The public wants assurance that the auditors of these huge multinationals have the clout to say something when they need to.
‘The commission did look at banking and insurance, but they were clearly convinced by our argument in this area. We don’t think it’s an exclusive field, so there is no reason other firms can’t break in. We also pointed out there are huge differences between the skills required to deal with merchant banks, investment banks and retail banks.’
The commission’s approval of the merger has not been published yet. It is likely to reach the member states at the end of the month. They will then be given three weeks to prepare a response before the meeting of the advisory committee. If it votes in favour of the merger as expected, the decision will be applied across the EU.
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