By Tom Sims
FRANKFURT (Reuters) – European Banks are calling on the European Union to designate them a critically important “strategic” sector, warning that their competitiveness and the bloc’s future are at stake, according to a report published on Tuesday.
The pitch by the European Banking Federation (EBF) leads a list of 45 policy recommendations that the region’s top banking lobby is making ahead of European elections in June.
The body’s president, Christian Sewing, last year urged that banks be recognised as strategic when he called them a “key factor for European sovereignty” in his role as Deutsche Bank’s chief executive.
But this is the first time that banks at the European level are officially making the request for such a status.
“It is essential to acknowledge the vital and strategic role of banks in Europe’s transformation,” Sewing said in a foreword to the 51-page report.
Despite the new push by the financial sector, the European Union does not publish a list of sectors it considers strategic.
Wim Mijs, CEO of the EBF, in a briefing with journalists to present the report, said that over the past 20 years Europe had “outsourced” its defence to the United States, its energy to Russia and manufacturing to China, something he said required a hard look at the region’s strategic sectors.
The bulk of the EBF report addressed regulation and its wish to streamline it.
Banking regulation got a major overhaul in the wake of the global financial crisis, which both regulators and bankers say made the industry more stable.
But banks now face “an excessive… and increasingly over-reaching” legislation that has become “overwhelming”, the report said.
The lobby called for a review of current regulation to judge how it affects not just stability, but also competitiveness and growth.
Bankers have long warned about what they call over-regulation, and European officials, including European Central Bank President Christine Lagarde, have countered that regulation must not be undermined.
“We are not asking for lowering standards,” Mijs said.
“Our regulation suffers from death by good intentions. You see that you over-complicate things.”
(Reporting by Tom Sims; Editing by Friederike Heine and Jonathan Oatis)
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