Caution needed! EU Policy makers might undermine

Date

12 May 2011

The core business of sound savings and retail banks, says ESBG

The one-size-fits-all-approach dominating the international and EU approach in important reform areas, notably Basel III, is prone to create obstacles to the long-term financing of the real economy by Europe’s savings and retail banks, declared ESBG, its representative body. The ESBG members make up one third of the European retail banking sector and consider the long-term financing of households, SMEs and local authorities as their core business.

“In the transposition of Basel III into European Law, the European authorities seem to forget the proportionality principle that was invented by the Basel Committee in the course of Basel II”, said Carl Eric Stålberg, ESBG President. “The complexity and demands of EU regulation should not undermine the commitment of retail banks to pursue their core business. Beyond stricter capital definitions and higher capital ratios, Basel III also introduces two unprecedented quantitative liquidity standards that are likely to produce significant and unintended effects on the liquidity management of banks”, he continued.

ESBG and the European banking industry in general also insist that the Basel III framework be implemented on a global scale to prevent competitive disadvantages for the European financial institutions. Finally, the European savings and retail banks are concerned about the cumulative impacts of the wide range of regulatory initiatives that are ongoing in the financial sector. These initiatives, however necessary and useful they are, also lead to direct costs and increase complexity and admistrative burden.

The complete messages of ESBG concerning the transposition of Basel III can be consulted on www.esbg.eu – “Warsaw declaration:
http://www.esbg.eu/uploadedFiles/Position_papers/warsaw%20declaration%20screen%20view.pdf .

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Notes to Editors:

Press Contacts:
Dirk Smet, Tel: +32 2 211 11 90 dirk.smet@savings-banks.com

About ESBG:
The European Savings Banks Group (ESBG) is an international banking association which

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