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ESBG responds to new Finance Watch report

ESBG responds to new Finance Watch report
​​​BRUSSELS, 6 December 2016​

The following is a response by ESBG Managing Director Chris De Noose to findings of the Finance Watch report "Representation of the public interest in banking" released yesterday:

"The findings related to savings and retail banks are pretty spot on. The 1000 saving and retail banks that we represent are built on serving local communities and helping SMEs thrive. Our members' business models reflects this.

"But policymakers would help society more if they took more into account the needs of local banks. Proportionality, which is enshrined in the EU treaties, could help serve this purpose to ensure that well-functioning local economies can continue to prosper. Policymakers need to open up more diary time with locally focused banks."

About the Finance Watch report

In a press release to announce the report, Finance Watch said: "The report asks what blocks the public from participating in deciding what banks do and how they are regulated; it goes on to outline numerous policy proposals gathered from debate with wider civil society. The report is the culmination of a two-year research project with civil society and launches with a public conference in Brussels on 7 December 2016.

"The research project, which began in 2015 and is a joint initiative between Finance Watch and the Hans-Böckler-Stiftung, was conceived as the tide began to turn on post-crisis banking regulation. The hopeful talk of 2009, reflecting the public's desire for change, has faded and while many pages of regulation have passed, little has fundamentally changed. Now the agenda is moving on and the opportunity to revive 'boring banking' is giving way to a revival of dangerous pre-crisis practices. In the last days, Finance Watch has drawn attention to the worrying lack of ambition in the European Commission's latest EU banking reforms."

The report states that stakeholder banks – which includes locally focused savings and retail banks that make up ESBG membership – "potentially offer a powerful way for the stakeholder groups that make up the general public to better represent their interests. Nevertheless, measures are required which increase their effectiveness in doing so and which guard against them slipping towards shareholder bank behaviour. These measures include focus on governance arrangements, restrictions on activities, and infrastructure that supports networks of smaller banks."

It also calls for "A rebalancing of the sector away from very large banks to a more diverse universe of small and medium sized banks is required, for the general good of Europe's economies and for better public interest representation. Above all this requires an end to "too-big-to-fail". Second, it calls for policies to promote stakeholder banks, which tend to be smaller, more typically "boring banks" lending to the real economy (and not trading with financial firms), anchored in local communities and which present clear and direct opportunities for the public to be active in their governance."


>> Discover: The values of savings and retail banks

>> Learn: About ESBG

>> Read: Finance Watch report (off-site, .pdf) 

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European Institutions; European Supervisory Authorities (EBA-ESMA); Regulation; Proportionality; Supervision; G-SIFIs; Financial supervision; Single supervisory mechanism; Business cases/models; Capital Markets Union; Corporate Social Responsibility; Double bottom-line; Responsible Business; Social dividend