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Emulating William Tell: Tackling the financial crisis without hurting the sound retail banking model

Date

02 Nov 2011

Sections

Euro & Finance

Brussels, 2 November 2011 – At the 3/4 November 2011 Cannes Summit, important decisions will be made to tackle the root causes of the crisis and to strengthen financial regulation. The World Savings Banks Institute and the European Savings Banks Group (WSBI/ESBG), and their members, would like to call the attention of the G20 members on key concerns, and highlight some proposals regarding in particular the regulatory, supervisory and prudential framework for the banking sector, financial consumer protection, microfinance, and the international accounting standards. 

Chris de Noose, ESBG-WSBI Managing Director said: “Regulators should guarantee that the transposition of financial reforms does not lead to unintended, potentially harmful, consequences. They should avoid that the international banking framework hinders savings and retail banks that actually contribute to stabilising the markets and supporting the real economy.”


Regulatory burden for the banking sector:  WSBI/ESBG welcomes reforms both at international and regional level that aim to reinforce the stability of the financial markets, but asks regulators to consider the impact of these reforms on functions that are crucial for economic growth, such as capital availability for SMEs and long term financing. 

Supervision and prudential framework: WSBI/ESBG appreciates the efforts to construct a more resilient banking sector and to address the weaknesses observed during the crisis. Although the goal to achieve a safer and more stable banking environment is supported, regulators should be cautious of introducing stricter and more demanding requirements and standards on banks as this might have a contradictory effect. 

Consumer protection: WSBI/ESBG believes that a strong commitment towards fair treatment of customers is a very important tool for establishing long-term banking relationships. It is especially true in the aftermath of the global financial crisis, when in many countries the trust and confidence of the general public in the banking sector is low. In this respect, WSBI/ESBG welcomes the G20 initiative to develop a G20 consumer protection framework. 

Microfinance: The G20 initiative on microfinance is a positive move towards the institutional recognition of microfinance and of its strength to address the access to finance gap, to empower vulnerable people and to fight social and economic exclusion. 

International accounting standards: The development of updated international accounting standards should be based on two principles: it should reflect the companies’ business models and reemphasize the need to find the right balance between amortized cost and fair value. Both guiding principles will serve the objective of achieving financial market stability.

Press Contacts:

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

Sara Tironi, Tel +32 2 211 11 91 sara.tironi@savings-banks.com

WSBI/ESBG – The Global Voice of Savings and Retail Banking

WSBI (World Savings Banks Institute) is one of the largest international banking associations and the only global representative of savings and retail banking. Founded in 1924, it represents savings and retail banks and associations thereof in 90 countries (Asia-Pacific, the Americas, Africa and Europe). It works closely with international financial institutions and donor agencies and promotes access to financial services worldwide in both developing and developed regions. 

ESBG (European Savings Banks Group) is an international banking association that represents one of the largest European retail banking networks, comprising about one-third of the retail banking market in Europe. It represents the interests of its members vis-à-vis the EU Institutions and generates, facilitates, and manages high quality cross-border banking projects. 

WSBI and ESBG members are typically savings and retail banks or associations thereof. They are often organised in decentralised networks and offer their services throughout their region. WSBI and ESBG member banks have reinvested responsibly in their region for many decades and are a distinct benchmark for corporate social responsibility activities throughout Europe and the world.

Please visit www.savings-banks.com.

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