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“While the EBF appreciates the certainty that these new capital and liquidity requirements bring to European banks, we are disappointed that the European Commission and Parliament have not succeeded in bringing forward a true Single Rulebook for banks as the agreed regulation has left a surprising degree of flexibility to Member States to vary central parts of the requirements on grounds of macro-prudential oversight, including different national capital buffers”, declared Guido Ravoet, Chief Executive of the EBF.
This national flexibility will not simplify the working of the Single Supervisory Mechanism under which the European Central Bank must oversee all banks under its responsibility according to their respective national rules.
Europe’s banks are pleased to see the agreement on a more workable liquidity regime that now more sensibly consists of a wider range of assets than merely sovereign bonds and is appreciative of the accommodation made for lending to small and medium-sized enterprises, which will avoid the increase in capital banks are required to hold in order to lend to these vital components of the European economy.
Ravoet said: “The Federation agrees with the need to instil long-term incentives for banks’ risk and remuneration appetites, but regrets that the European Parliament has persevered with such draconian restrictions in isolation from other industries and largely in excess of the internationally agreed standards.”
With this agreement, Europe has taken a significant step towards greater financial stability of its banking sector, which Europe’s banks have already anticipated by moving to significantly improved capital levels. “In the spirit of a global level playing field, the EBF would urge the Commission to remain vigilant and maintain pressure on all G20 signatories of Basel III to implement without delay the internationally agreed capital rules”, concluded Guido Ravoet.