Financing the Transition: Public Banks call for Leaner Regulation

Berlin - As the European elections approach, public banks are emphasizing the urgent need for the EU to implement the Basel III banking package and conclude the regulatory measures addressing the financial crisis. They warn that additional regulations would limit the much-needed financing capacities and diminish the competitiveness of European banks.

Iris Bethge-Krauß, Managing Director of VÖB, states: “We face significant challenges in financing the green and digital transition of our economy. Success is only possible with a robust financial and banking sector in the EU. To achieve this, we need banks that are profitable in the long term. After 16 years of increased regulation, it is time to recognize that each new regulatory requirement restricts banks from fulfilling their essential role in financing the transition.”

VÖB specifically urges policymakers to:

• Halt the trend towards increasingly detailed regulations, advocating instead for more principles-based regulation and supervision.
• Evaluate and streamline the current regulatory framework, utilizing the upcoming revision of the macroprudential framework to simplify and make the capital buffer concept more flexible.
• Promote efficient capital markets by enhancing the securities culture and revitalizing securitization.
• Freeze the EU bank levy once the target level of the EU resolution fund is reached.
• Improve the marketability of promotional products at the European level.
• Review and simplify the various legal acts of sustainable finance regulation to ensure consistency and ease of implementation.

Detailed explanations of these demands can be found in VÖB’s Positions on the 2024 European Elections on the VÖB-Website. Further proposals for strengthening EU capital markets and enhancing European funding policy are also available on the website.