AGB/Schmitz: Splitting banks is bad for the economy

26 November 2012

"Sensible, internationally-consistent regulation is not something we see as a nuisance – it is in our very own interest", stressed Andreas Schmitz, President of the Association of German Banks.

The economy and the financial sector in particular needed a regulatory framework. “It is – and remains – the job of policymakers to lay down the framework for us, but there is no sense in just always tacking on additional regulation without checking what impact the measures have”, Mr Schmitz said.

Mr Schmitz urged those in charge to stick firmly to the course set by the G20 in Pittsburgh by now implementing the new global capital standards, setting up a European banking supervisor and establishing as soon as possible a single EU crisis management regime that effectively addressed the too-big-to-fail problem. “Like any good medicine, these measures first have to kick in and should not be supplemented by fashionable new cures such as a dual banking system whose risks and side-effects are cause for some concern – particularly for the German economy. Nobody has yet been able to put a convincing case to me for splitting banks”, he added.  

On the financial markets as well, fair, equal, and reliable competitive conditions were needed for all players. That was only possible with appropriate regulation. So it was essential that the US, as the world’s biggest and most important financial centre, implemented the new Basel III rules too. It had pledged to do so along with the other G20 member countries. US supervisors should now name a concrete date for implementation. “Otherwise there is the danger of these quite sensible rules being shelved forever”, Mr Schmitz argued. To avoid any competitive handicap for the European financial sector, implementation of Basel III in the EU should be synchronised as far as possible with the US and certainly not take effect before the beginning of 2014. 

Press release

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