Status: 08.09.2021 3:28 p.m.
While the US banks have long been raking in billions again, Europe’s institutes are lagging behind. The managers blame it on overregulation – and demand a radical change of course.
After the tightening of the rules for banks as a result of the financial crisis, in the opinion of Commerzbank boss Manfred Knof it is now time to accommodate the financial institutions and loosen the tight corset of rules and regulations. “First of all, we don’t need any more, but smarter regulation,” said the manager who runs Germany’s second-largest listed bank. “We also need a framework that does not burden us further, but opens up room for maneuver,” said the banker at an event organized by the “Handelsblatt”.
Deutsche Bank CEO Christian Sewing and Sparkasse President Helmut Schleweis also plead for less regulation. Politicians must prevent Germany and Europe from falling behind in international competition. In fact, a look at the latest quarterly figures from the major international banks shows that the European houses, especially the German ones, still earn significantly less money than their competitors from the USA. The associated weakness of action of the institutes is driving global corporations increasingly into the arms of the US houses. However, this development could not be in the interests of the German and European economy, warn the bank managers.
Uniform European capital market required
Commerzbank boss Knof is therefore calling for the future federal government to take steps to strengthen the European capital market and Germany as a financial center. “Germany and Europe have great potential. Politics must promote innovation so that we do not fall further behind in international competition,” said Knof. He had previously demanded that politics should not get lost in the small and small when creating a common internal financial market. “National interests must take a back seat to European sovereignty.”
The cost of regulation should also be reduced, he said. These burdened the institutes and harmed customers. The introduction of a uniform European capital market is also so important so that companies can get fresh money more easily. “It is time to remove the hurdles and exploit the full potential of the banking market.” Politicians must now set the course for this.
Sewing calls for “big leap”
In fact, there is no resolution fund in the US like there is in Europe. The requirements for sustainable financing are also less strict. Deutsche Bank boss Sewing therefore demanded more effort for a unified capital market in Europe. It is true that it is right to regulate large banks particularly carefully. “In Europe, however, we have done a lot at the same time to prevent banks from becoming big. That is a questionable course – the importance of size in the financial world is increasing exponentially,” said the manager, who has been working since July 1 is also President of the Association of German Banks (BdB). Rather, it is finally important to use “Europe’s economies of scale”.
Sewing therefore calls for a radical change of course. “We can no longer afford an evolutionary path, we need a big leap here. That will also accelerate the overdue consolidation across national borders,” said the banker.
The capital market union called for by Sewing and Knof is about removing bureaucratic hurdles between the individual EU states so that companies can raise money more easily and according to uniform rules. Consumers should also have more options for cross-border investments. In Europe – in contrast to the USA – loans and financing are mainly granted by banks. The EU Commission’s plans for a capital markets union have been on the table since September 2015, but implementation has stalled.