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Locally focused banks support 'real economy' growth

Locally focused banks support 'real economy' growth

​​​​​WSBI-ESBG Managing Director Chris De Noose opines in News & Views editorial



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BRUSSELS, 26 September 2019



An article published earlier this year in The Economist, a weekly London-based newspaper, states how banks need to reach the “elusive 10%”1 return on equity. The piece rightly pointed out the need for operational efficiency to help boost banks’ bottom line. 

Being efficient is stock and trade for banks, but so is “social” performance. Retail, regional, responsible banks are especially keen on this front. WSBI-ESBG members give billions to pioneering foundation work, have tens of thousands of branches and connect digitally with young and not-so-young. 

Global investors seek returns – on equity, assets or otherwise. However, these “electronic herds” do not help build the real economy. Locally focused banks do, meeting people’s needs by money safekeeping, securing personal data, executing payments, and granting loans for home purchases and business, namely SMEs.

Beyond the day-to-day world of banking, a bigger game is at play. Shifts in public opinion have put globalisation under the microscope. Critics of a global system say it leads to economic decline and rips apart the social structure of once-prosperous cities and towns. If that is true, then locally focused savings and retail banks are ideally placed to address it. Our member banks help prepare communities in a globalised world. In fact, our members provide service through mobile, online to some 1.7 billion people around the globe. As savings and retail banks take on all sizes and legal forms, they play an essential role to ensure diversity, which remains crucial to maintaining the stability of the financial system. Concentration of economic and financial resources fails markets, economies and people.

A new European Parliament should bet on savings and retail banking

In Europe, the new European Parliament and new Commission present an opportunity to show that savings and retail banks support Europe in a big way. EU policymakers and stakeholders need to back us too. The best way is to apply a proportionate approach to banking rules. That argument is spelled out in our ESBG memorandum to EU policymakers released earlier this year as well as our G20 institutional positions paper released in June. American member ICBA’s “regulatory relief” efforts have been embraced by US policymakers. It receives growing support from policymakers in Asia, Latin America and Africa. 

Taking a proportionate approach avoids unnecessary regulatory obstacles that prove costly and inefficient. A proportionate approach will be especially important to create a more sustainable and inclusive economy. If policy falls short, expect more calls from populists for disruption that will hurt, not help people and communities around the world.

​We hope you enjoy this edition of News & Views, which explores G20 event in Tokyo that addresses the globalisation challenge. Relatedly, we share breakthroughs by Scale2Save partner PostBank Kenya, P.T. Bank Tabungan Negara (Persero) in Indonesia, and highlight how member APAP in the Dominican Republic helps the hearing impaired. There efforts demonstrate that innovative, locally focused banking help people and economies to thrive in a globalised world. 


1 The Economist: “How to fix Europe’s lenders”​, 4 April 2019. 





Sustainable development; Banking Technology; Financial inclusion; European Supervisory Authorities (EBA-ESMA)