FRANKFURT: The European Central Bank can keep supervising France's third-biggest cooperative bank, Credit Mutuel, after a challenge by a member of the banking network was rebuffed by the European Union's highest court.
Credit Mutuel Arkea, which comprises regional banks in western and central France and is seeking financial independence from its parent group, had challenged the ECB's power to oversee the whole network of lenders as a single entity.
But the General Court, which is part of the European Court of Justice, struck down the appeal, upholding the ECB's decision and setting a precedent for how banks with a decentralised structure should be supervised in the euro zone.
"The ECB may exercise prudential supervision of the Groupe Credit mutuel through the Confederation nationale du Credit mutuel, including in respect of the Credit mutuel Arkea," the court said.
Credit Mutuel Arkea said in a statement it contested the interpretation of the European law and it would appeal.
Arkea had also objected to the ECB raising its capital requirements.
Credit Mutuel, with a French retail market share of more than 15 percent, has a central body that is responsible for the solvency and liquidity of all regional entities, including that of Arkea.
Credit Mutuel had assets of almost 800 billion euros ($940 billion) at the end of last year, including Arkea's 120 billion euros.
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