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Chaired by Christian Clausen, President of the EBF, the Board reviewed ongoing developments in the European banking sector and noted with satisfaction that the European Union has made considerable progress towards the completion of Banking Union. Together with the European banking industry itself being in a better position to handle the effects of financial crises, it makes for a more stable financial sector.
The creation of single supervisory and resolution mechanisms for the banking sector in the European Union nears completion. An essential step is the completion of the asset quality review by the European Central Bank. The EBF Board reiterated that European banks fully support this ambitious and unprecedented comprehensive assessment.
Specifically, European banks remain deeply concerned over the European Commission proposal on structural reform of the EU banking sector. The EBF Board challenges the need for such a proposal and calls on policy-makers to carefully consider the economic implications. The structural reform risks being detrimental to the EU economy as it will affect the investment banking services that support our export oriented economy. The regulatory reforms already hand the supervisory community substantial tools to prevent and target excessive risk-taking and to ensure orderly wind-down of failing banks without recourse to public funds or implications for financial stability. These powers and tools should first be implemented and their cumulative impact assessed before additional measures are considered.
Board Members expressed strong concern over the agreement by a group of EU Member States to adopt a Financial Transaction Tax (FTT) on shares and some derivatives by year-end. This tax will impact the real economy by increasing the costs to households and corporates to finance themselves, and in spirit is contradictory to the objective of fostering growth in Europe. The Board welcomes the step to conduct impact assessments at the national levels to highlight these effects more clearly. The extraterritorial impact of the FTT on non-participating Member States also remains a critical concern for Europe's banks.