European Banks committed to financing the economy and supporting regulatory reforms. At the meeting of the Board of the European Banking Federation (EBF), held on Friday 24 April in Stockholm, Presidents of the national banking associations reaffirmed their commitment to support the economy.
Despite the current crisis, banks continue to compete actively to offer good quality services, and remain committed to financing the Economy through lending, says Alessandro Profumo, president of the EBF and CEO of Unicredit Group. The EBF Board members stressed the necessity to maintain universal financial institutions in Europe to help the European economy be successful and recover rapidly from the crisis.
The Board members closely examined the impact of the state support measures on the banking industry. Initiatives taken so far by national governments have been of paramount importance to avert the risk of a systemic financial crisis, but competitive distortions among Member States and banks should be limited as much as possible.
Transparency is key in this process, continues Profumo. The conditions which accompany any state aid measure must be clear and transparent, in order to allow the market to understand the degree of distortion of the competitive conditions and countervailing measures. And at the same time, exit strategies must systematically be part of the measures. Only then can we ensure healthy competition which will help restore the health of the markets.
The EBF Board members indeed called for a return as soon as possible to a free market without direct or indirect government intervention.
European banks are firmly engaged in the establishment of a better regulatory architecture. As regards supervision, the EBF reiterated its welcome of the recommendations of the de Larosire Group report, as well as the ensuing proposals put forward by the European Commission and the G20.
The EBF particularly supports the introduction of macroprudential supervision and would welcome the further strengthening of the colleges of supervisors, notably through the participation of a European-level central authority in the colleges. Such measures will ensure common core rules, consistent practices and a closer integration of European financial markets.
The EBF also welcomed the G20 commitments to reinforce the fabric of the global economy, in particular, by reforming the regulatory and supervisory frameworks. It also supported the idea to transform the Financial Stability Forum into a global regulatory coordinator, to strengthen adherence to international prudential standards and to achieve consistency in valuation and accountancy methods. European bankers acknowledged the international agreement to only apply more stringent capital requirement measures once markets have clearly recovered.
L.D.