03 October 2008

Banks criticise proposed interbank lending restrictions in CRD

The European banking community rejects the Commission proposal to limit interbank exposures to 25 % of own funds. This affects adversely the scope and cost of banks’ credit activities in future, EBF states.

The European banking community rejects the Commission proposal to limit interbank exposures to 25 % of own funds. The EBF states in a first reaction that this may well affect adversely the scope and cost of banks’ credit activities in future. Against the backdrop of a likely economic slowdown in Europe and worldwide, the new large exposures regime constitutes an additional concern, EBF states. On the other hand the proposed alternative threshold of € 150 million, which could be used particularly by smaller banks, is highly welcomed, as the German BdB and the British BBA underline.

 

In particular the proposal introducing colleges of supervisors for all cross-border banking groups and to harmonise hybrid instruments is supported by banking groups.

 

However, Hans-Joachim Massenberg, Deputy General Manager of the BdB rejects the Commission's plans to require banks to retain a share of the risk in future also after securitising loans. “A mandatory requirement to retain part of the risk exposure will not remove the weaknesses in risk management identified in the wake of the subprime crisis”, he says.

 

Press release German Banking Association

BBA statement

EBF statement attached below