European Parliament reports on retail banking: constructive, fair and balanced, says ESBG

Date

05 Jun 2008

Sections

Innovation & Enterprise
Euro & Finance

ESBG (European Savings Banks Group) welcomes the two European Parliament reports on retail banking voted in plenary session today as they recognize pluralism is an asset for Europe’s retail banking market.

According to ESBG, MEP Pittella’s report on the Sector Inquiry into Retail Banking recognises and appreciates the realities of Europe’s retail banking sector: its particular market structure, the potential for benefits of banking cooperation, and the importance of competition. ESBG, whose Members are characterized by the three Rs ‘Retail, Regional, Responsible’, welcomes in particular the fact that the major role played by retail banking, and especially savings and cooperative banks, for the development of Europe’s regions is clearly being acknowledged.

MEP Karas’ report on the Green Paper on Retail Financial Services in the Single Market underlines that demand for retail banking services is mainly local, due to linguistic and cultural factors and the preference for personal contact - an assessment which is confirmed by the experience of ESBG’s Members. ESBG also agrees with the report’s assessment that competition in Europe’s retail banking sector very much depends on the large number of market participants and that diversity of legal forms should be encouraged.

In terms of how to improve the relationship between retail banks and consumers, which both reports concentrate a lot on, ESBG fully supports the aim of advancing and promoting financial education for the empowerment of consumers. ESBG even held a major conference in mid-April comparing the EU and US experiences in consumer policy, including financial education.

There are, however, some proposals in the reports which ESBG views with great concerns as they place an excessive burden on banks or may, unintentionally, lead to undesirable side-effects, such as product standardisation. One example is the Pittella Report’s recommendation of the creation of a European search engine for retail banking products. The intention to improve comparability is, of course, commendable, but ESBG fears that potential benefits will be outweighed by disproportionate costs, impediments to product innovation and decrease in product diversity

Overall “ESBG sees the Karas & Pittella reports as constructive, fair and balanced”, commented ESBG Managing Director Chris De Noose, “These reports show that diversity in Europe’s retail banking landscape is understood and appreciated by the European Parliament”.

Notes to Editors:

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

Claire Camus, Tel: +32 211 11 91 claire.camus@savings-banks.com

About ESBG:
The European Savings Banks Group (ESBG) is an international banking association which represents one of the largest European retail banking networks, comprising about one third of the retail banking market in Europe, with total assets of €5,215 billion (1 January 2006). It represents the interests of its members vis-à-vis the EU Institutions and generates, facilitates and manages high quality cross-border banking projects.

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. ESBG members banks have been reinvesting responsibly in their region for many decades and they are a distinct benchmark for corporate social responsibility activities throughout Europe and the world.