Over the past few years, legislation within the EU financial services sector has multiplied as a result of the financial crisis. Regulation has a key role in upholding the stability of the European economy, reinforcing the internal market as well as protecting investors and consumers. At the same time, the increasing amount of legislative measures, has resulted for many areas in regulations which are partly overlapping, contradictory, overly detailed or even redundant. That is why this initiative put forward by the European Commission in order to review the regulation and processes is welcomed by the banking sector.
Banks see here an opportunity to highlight, that priority needs in any event to be given to reviews and amendments, which aim to improve the coherence, the quality and the proportionality of regulations. Our conclusions, will show numerous existing issues notably in the reviewed Markets in Financial Instruments Directive (MiFID2), the European Market Infrastructure Regulation (EMIR), the Banking Recovery and Resolution Directive (BRRD), etc. The European Banking Federation will propose concrete solutions, to simplify or solve these existing problems.
This consultation is also another opportunity for EU Banks to reiterate that Europe is at the same time considering several counterproductive moves. Eleven EU countries intend to introduce a financial transaction tax in 2016 that could generate the re-location of trading activities outside of the EU. More worryingly, the project of structural reform could be particularly damaging for universal banks if not carefully thought through. Does Europe want its own investment banks to be capable of operating efficiently in capital markets? Or are European states happy to look outside Europe for investment banks which can finance their debt? Are they willing to force European companies to rely solely on non-European banks for their investments and hedging solutions?
According to EBF’s president, Frédéric Oudéa: “Such reliance would be unwise. Having banks able to finance European companies is an essential part of the EU’s economic sovereignty. Europe’s industrial champions will be at a serious disadvantage if they cannot rely on access to capital when their rivals elsewhere in the world can.”
More importantly, if the European Commission’s goal is to achieve the revival of growth in investment and capital markets through the EFSI and the CMU initiative, a first requirement is that all legislative pieces should consistently support this goal.
EBF Contact: Olivier Thomas (firstname.lastname@example.org)