No forced recapitalisation for financial institutions, says European Savings Banks Group

21 October 2011

The forced recapitalisation plan for European financial institutions which the European Commission is working on is a matter of concern for the European savings and retail banks that are members of the European Savings Banks Group.

Indeed, it is for now totally unclear how such a forced recapitalisation would be funded and how this plan would fit into already existing recapitalisation plans on national level. “A forced recapitalisation would mean that many of our members would lose their management rights for their own institutions”, declared Chris De Noose, ESBG Managing Director. “ESBG calls for a full respect of management rights, especially for those institutions that comply with all current requirements and have always proved to be stable, sound and reliable.”

ESBG firmly believes that the recapitalisation plans should be restricted to global systematically important financial institutions (the so-called G-SIFIs). ESBG would like to stress also that forced recapitalisation plans could result in greater market uncertainty. It would be far more adequate to wait until the transposition of Basel III through the CRD IV Directive has been fully implemented.

Press release

© ESBG