MADRID, 18 November 2016 – The Spanish Confederation of Savings Banks (CECA) welcomed today in Madrid the board meeting of the European Savings and Retail Banking Group (ESBG).
ESBG and its members the same day released a document illustrating their support to continued economic growth and to employment in Europe. ESBG members play a key role in jobs and growth with more than €500 billion in loans to SMEs.
The meetings were chaired by ESBG and CECA President Isdiro Fainé, and was attended by top banking leaders including German Association of Savings Banks (DSGV) President Georg Fahrenschon, Austrian Savings banks Association President Gerhard Fabish and ESBG Managing Director Chris de Noose.
ESBG is a European banking association that brings together close to 1000 banks from more than 20 countries that all specialise in retail banking services for households and SMEs. Financial institutions that comprise ESBG membership deliver banking services to more than 180 million clients in Europe.
An important aspect of the work of ESBG focuses on the monitoring of European financial regulation. ESBG maintains permanent contacts with the European Commission, the European Banking Authority and the European Central Bank. For example, ESBG Representatives this week met with Danièle Nouy, president of the European Single Supervision Mechanism of the European Central Bank. During this meeting, an analysis was made on the impact of the prudential regulation on the retail banking business model.
Several meetings with Spanish authorities with international responsibilities have been organised within the framework of the board meetings. Vice-President of the Spanish Central Bank and incoming President of the Institute for Financial Stability Fernando Restoy, Financial Action Taskforce President Juan Manuel Vega, as well Treasury as Director General José Maria Fernandez, who also serves as an advisor at the European Investment Bank.
Isidro Fainé stated: "There is need to address the challenges facing the European economy. We need to avoid excessive regulation, tackle the digital challenge and put in place economic and monetary measures that sustain economic growth and employment. This is essential for the banking sector."
Growth and Employment
ESBG members are the main source of financing for European SMEs, which constitute the backbone of the European economy. In 2015, they granted €500 billion loans to these companies that make up 99% of production within the European Union and one third of employment in the private sector. Strengthening the retail banking sector's financing capacity translates into boosting economic growth in Europe.
Savings and Retail Banks in ESBG seek a return to normal of interest rates. A sustained period of low or even negative rates entails a risk for bank clients and SMEs and potentially endangers financial stability.
ESBG promotes a diversified European banking sector with a service offer that is adapted to the retail banking client. That means safeguarding client proximity, the ultimate hallmark of savings and retail banks' business model. In order to be efficient, banking supervision needs to take into account the need for diversity of business models.
Need has arisen for a global reflection on the cumulative impact of all the regulatory initiatives that international and EU authorities have taken, namely the EU Single Resolution Board, the Single Supervisory Board and the Basel Committee for Banking Supervision. The current regulatory wave might have a negative effect on local banks, especially at a moment when more lending activity is needed for households and SMEs. That is why ESBG members are convinced that the European legislation needs to be based on the proportionality principle.
Isidro Fainé concluded: "The savings and retail banking business model is a catalyst for SME financing and should be high on the agenda of the European Commission's growth and jobs agenda. It is necessary to increase the recognition of the important role of retail and savings banks for the development of local economies."
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