11 October 2012

ESBG Retail Banking Conference - Strength in our roots

"We face challenges and opportunities that we have never before encountered", ESBG Managing Director Chris De Noose declared in his closing speech. These challenges are "making us rethink the future, while maintaining our diversity, which is a strength rather than a weakness".

Yes, Mr De Noose, ESBG Managing Director, continued, savings and retail banks agree with the EU decision-makers who participated in the conference that we need to stabilise the financial sector and decrease the likelihood of future meltdowns. But we can’t risk diminishing the sector’s capacity to contribute to the prosperity of the EU by financing the economy both now and in the long run (as long-term investment appears to be the next challenge).

Mr De Noose highlighted the following three points:

• First: Our economic model has not failed. Trying to fix what is not broken often results in breaking it. Policymakers must be aware that the part of the banking industry that is not broken is the part that provides the funding the real economy needs: we responsibly collect savings and lend them to individuals and SMEs. Other banks, meanwhile, have not only failed, they have failed society. One reason the savings and retail banking model has not failed is because its roots are planted in the society that it serves – our roots are our strength. We want to rethink the role of banking in society, to educate a new generation of bankers with responsible attitudes – hence our launching an online master in responsible banking.
• Second: Regulation, especially prudential regulation, is an attempt to respond to the crisis of confidence but it will not be enough to restore customer confidence. As the National Bank of Belgium’s Prudential Policy and Financial Stability Deputy Director Jo Swyngedouw said during the morning panel discussion, we – supervisors, bankers and customers – are all in the same boat. Instead of taking the risk of drowning the European banking sector in regulation, decision-makers should encourage that part of the banking sector which “deserves customers’ confidence”, as BEUC Director General Monique Goyens, participating on the same panel, put it. Indeed, conducting our business using services and products dedicated to SMEs and personalised follow-up with households makes us socially committed, which is why regulation has to facilitate and not hamper this natural inclination.
• Third: When it comes to the banking union, ESBG believes that the national supervisor has to remain the cornerstone of supervision in the EU. In addition, savings and retail banks are committed to ensuring solid protection to depositors, but we are extremely attentive to the funds under discussion and to their connection to the current ones that have proved their efficiency, especially by ensuring the role of early intervention. Regulation has to be adapted to the business model and not the other way around; business models are shaped in order to provide our customers with the range of services they need, focusing on loans – and we want to make sure that any potential structural reform enables us to continue to do so.

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