No forced recapitalisation for financial institutions, says European Savings Banks Group
[21 10 2011]
The forced recapitalisation plan for European financial institutions the European Commission is working on is a matter of concern for the European savings and retail banks that are member of ESBG.
Indeed, it is for now totally unclear how such a forced recapitalisation would be funded and how this plan would fit into already existing recapitalisation plans on national level.
“A forced recapitalisation would mean that many of our Members would lose their management rights for their own institutions”, declared Chris De Noose, ESBG Managing Director. “ESBG calls for a full respect of management rights, especially for those institutions that comply with all current requirements and have always proved to be stable, sound and reliable. Focusing now on solvency ratios of financial institutions diverts the attention of the real problem that needs to be tackled without further delay : the soundness and solvency of the sovereign states themselves.”
ESBG firmly believes that the recapitalisation plans should be restricted to global systematically important financial institutions (the so-called Global SIFIs). “Retail banks and savings banks have already borne the brunt of the costs of the crisis and should not take any further blame for the malpractices of other banking businesses”, said Chris De Noose.
ESBG would like to stress also that forced recapitalisation plans could result in greater market uncertainty. It would be far more adequate to wait until the transposition of Basel III through the CRD4 directive has been fully implemented.
Dirk Smet, Tel: +32 2 211 11 90 firstname.lastname@example.org
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 almost €6,000 billion (January 2009). 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 member 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.