EU banks, Italia, France and Spain call for relaxation of rules
Ahead of a European Commission report on the future of credit rules expected in July, they call for less restrictive rules
by Beda Romano
For months, if not years now, the wave of US financial liberalisation, 15 years after the debt crisis, has been worrying the banking sector in Europe. Ahead of a European Commission report on the future of credit rules due in July, three member states - France, Spain and Italia - have urged the EU executive to relax some rules. The hope is that other governments will join the initiative.
In a document circulated here in Brussels and entitled Competitiveness of the European banking sector, the governments of Paris, Madrid, and Rome suggested to the European Commission 'targeted adjustments' in certain business lines in which banks face 'fiercer international competition'. The document states: 'If the European Union were to apply the rules more restrictively, market share losses could be difficult to recover'.
In the area of commercial financing, prudential standards in Europe could, according to the three countries, contribute "to an uneven playing field in areas where competition is particularly high". The document states: 'The European Union should ensure that the overall level of prudential requirements (...) remains risk-adjusted and meets, on an equal footing, both the financing needs of the economy and the safeguarding of financial stability'.
Moreover, there are still limitations in the management of bank liquidity across borders. France, Spain and Italia therefore propose the creation of ad hoc forms of cooperation between the largest banks, with uniform rules and European Central Bank supervision. Regarding the idea of a joint and several guarantee of deposits, which has never taken off, the three governments suggest creating a mutual support mechanism by the national mechanisms called upon to insure current accounts in times of crisis.
The initiative of the three countries clashes with the birth in recent months of a group of six member states, all eager to relaunch the great project of capital market union. In addition to France, Spain and Italia, the group includes Germany, the Netherlands and Poland (see Il Sole/24 Ore of 29 January). The G6, as it is now called, met at the end of May in Berlin and developed common positions on various aspects, including the transfer of market supervision to EU level.
