Yesterday, Wednesday 8th of November, the EACB, together with the European Parliament SMEs intergroup organised a breakfast discussion on the topic of "The CRR/CRD IV review : Impact on Financing the Real Economy and Co-operative Banks", at the European Parliament, hosted by MEP Othmar Karas, Chair of the SMEs intergroup and MEP Kay Swinburne, Vice Chair.
Main points of the discussion and speakers highlights:
- the importance of Co-operative Banks, as "backbone for SMEs financing" and the crucial role of diversity of the European banking landscape with banks of different business models to maintain a strong and healthy economy;
- the regulation should not to be a burden on local banks: reporting and disclosure requirements shall be reduced in order for them to keep playing their role on financing the real economy;
- the respect of the proportionality principle and the renewed commitment to avoid any "one size fits for all".
In her introduction, Ms. Swinburne insisted on the need to well define proportionality in the CRR/CRD4 review. Mr. Simon, the rapporteur, provided some elements of his forthcoming report (to be published in the coming weeks,) also stressing the importance of defining proportionality combining quantitative and qualitative elements. This is essential to maintain diversity and allow local, simpler banks to deal with increasing compliance reporting or disclosure burden. Mr. Rehulka, EACB representative, insisted on the importance of a simplified framework and welcomed the reliefs proposed by the EU Commission’s proposal and possibly the Parliament’s report. This should also apply to resolution framework and MREL and in the trading book review. Mr. Rehulka stated: "There are large levels of diversity and this makes Europe so strong. It is clear that this diversity has to be maintained. Both types of banks need to fulfill minimum requirements for capital and liquidity, but there is also regulatory pressure and low interest rates, which are forcing smaller banks to merge. Last year they had 50 mergers out of 430 banks. When thinking about proportionality, they need to be clear, in the future do they want a few large banks, or to maintain smaller banks within the EU?"
Mr. Huemer highlighted the need to maintain and extend the SMEs supporting factor in the CRR/CRD4 review. Mr. Wiedner, EU Commission, expressed the commitment to continue working with European Parliament and EU Council in the coming months.
Statement Mr. Othmar Karas, MEP:
"In the course of the ongoing CRDIV/CRR-review the diversity of the European banking landscape and the voices of all affected stakeholders need to be thoroughly taken into account. This is why I welcome today's SME Intergroup debate with the European Association of Co-operative Banks on the implications for local and retail banks and their contribution to the financing of the real economy. Smaller and regional institutions are more domestically-focused, have different risk profiles and interdependencies with the economy and often face higher implementation costs of regulation than financial institutions which are larger and globally active. I therefore fully support the extension of the principle of proportionality from a regulatory and supervisory perspective by introducing effective measures to reduce administrative and organisational burden such as in reporting or disclosure requirements."
Statement Mr. Hervé Guider, EACB General Manager:
"SMEs and Co-operative Banks are crucial players in the European Economy. The European Parliament has already emphasised this in its resolution of 2016 on access to finance for SMEs: "A diversified, well-regulated and stable financial services sector (...) best serves the actual funding needs of SMEs and the real economy, enabling long-term sustainable development". This is essential in the context of the CRR/CRD 4 review to underline what we consider priorities: 1- First, maintaining and expanding the scope of the SME supporting factor is key to sustain the credit flow to the real economy; 2- Second, Proportionality in the regulatory framework, in particular on the reporting and disclosure requirements to reduce administrative costs and allow banks to focus on credit policies; 3- Third, The importance of diversity and of taking into account the specificities of co-operative banks in the implementation of the new market risk and the resolution framework. Dialogue with stakeholders is precious. We would be glad to continue contributing to the work of the Parliament in the forhcoming months."
