European banks 'remain fully committed to financing economy and fostering growth'

The European Banking Federation (EBF) Board welcomed banking union, but warned on the detrimental effects of the proposed banking structural reform and the FTT.

- Banks welcome progress towards banking union, reiterate support for asset quality review.
- Board: Economic implications of banking structural reform proposal and financial transaction tax (FTT) need more careful consideration.

The Board of the European Banking Federation, comprising the presidents of 32 national banking associations in countries from the European Union and the European Free Trade Association, met in Athens today (9 May) for its 118th meeting.

Chaired by Christian Clausen, president of the EBF, the board reviewed ongoing developments in the European banking sector and noted with satisfaction that the European Union has made considerable progress towards the completion of banking union. Together with the European banking industry itself being in a better position to handle the effects of financial crises, it makes for a more stable financial sector.

The creation of single supervisory and resolution mechanisms for the banking sector in the European Union nears completion. An essential step is the completion of the asset quality review by the European Central Bank. The EBF Board reiterated that European banks fully support this ambitious and unprecedented comprehensive assessment.

"A truly European banking landscape is emerging, with a single set of rules for all banks and a single supervisor. Banking Union is a major EU achievement and will have a lasting impact, on banks as well as on the economy," said Clausen. "As banks we are committed to making it work."

"It is also clear that this is not the only financial reform that has been introduced. In recent years banks have been subject of several waves of new regulations, which is prompting a major business restructuring in the sector. The collective impact of these reforms however, remains unclear. There is a risk that new measures may harm the ability of banks to finance the economy. We need to develop a better understanding of their cumulative impact," he added.

Specifically, European banks remain deeply concerned over the European Commission proposal on structural reform of the EU banking sector. The EBF Board challenges the need for such a proposal and calls on policy-makers to carefully consider the economic implications. The structural reform risks being detrimental to the EU economy as it will affect the investment banking services that support our export oriented economy.

The regulatory reforms already hand the supervisory community substantial tools to prevent and target excessive risk-taking and to ensure orderly wind-down of failing banks without recourse to public funds or implications for financial stability. These powers and tools should first be implemented and their cumulative impact assessed before additional measures are considered.

Board members expressed strong concern over the agreement by a group of member states to adopt a Financial Transaction Tax (FTT) on shares and some derivatives by year-end. This tax will impact the real economy by increasing the costs to households and corporates to finance themselves, and in spirit is contradictory to the objective of fostering growth in Europe. The board welcomes the step to conduct impact assessments at the national levels to highlight these effects more clearly. The extraterritorial impact of the FTT on non-participating member states also remains a critical concern for Europe's banks.

Wim Mijs appointed as EBF chief executive

Wim Mijs, chief executive of the Dutch Banking Association, has been appointed as the new Chief Executive of the European Banking Federation. He will succeed Guido Ravoet, who is retiring from the EBF per 1 September. The appointment was agreed today (9 May) in Athens by the board of the EBF.

Mijs has been CEO of the Dutch Banking Association, known as NVB, since 2007. In this role he also chaired the Executive Committee of the EBF between 2012 and 2014. In 2011 he was appointed chairman of the International Banking Federation in London.

"I'm honoured to represent the European banking sector during these interesting times," he said. "The European banking sector is going through a crucial period of time with regulatory overhaul, the establishment of the Banking Union and the centralised supervision from Frankfurt. The biggest challenge for the EBF will be to restore trust in the sector as a catalyst for recovery and economic growth and also to explain the importance of banking and its role in the economy and society."

"Wim is familiar to the EBF and its stakeholders. We have a strong trust in that he, with his experiences and skills, will contribute in a very good way to the further development of the EBF and serve its members," said EBF President Christian Clausen. "On behalf of the EBF Board, I would like to thank Guido Ravoet for a very dedicated and appreciated contribution to the EBF organization over several years and in a challenging period of time," he said.

Ravoet will stay on as Secretary General of Euribor-EBF, which is in the process of being renamed as the European Monetary Market Institute, or EMMI.

"It was both a privilege and a challenge to defend the interests of European banks during this turbulent period of regulatory reforms in the wake of the financial crisis," said Ravoet. "I’m looking forward to meeting a similar challenge with regards to the regulatory reforms of financial benchmarks."

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