The banking associations of Austria, Croatia, Denmark, Germany, Italy, Luxembourg, Poland, Slovakia and Slovenia note that the articulated and detailed financial regulation entails for medium and small banks, in particular, disproportionate burdens and costs: over 80% of them are based in the states where these associations operate. Although the EU banking sector reform package has introduced a first series of measures aimed at easing the compliance burdens for these institutions, further action appears necessary. As illustrated in a position papershared among the nine Associations, including Abi, the main areas of potential intervention appear in the provisions on reporting and remuneration.
The objective, the joint document states, is not to question a regulation whose plant is adequate: the same capital and liquidity requirements must continue to be applied in the presence of the same risks. However, some measures do not appear to be fully consistent, considering the size of the banks involved, nor do they contribute to financial stability. This results in costs that are undoubtedly disproportionate to the benefits sought.
As an example, the document mentions the reporting requirements, which translate into an enormous amount of pages and data to be managed, with considerable efforts by the banks, in terms of both time and resources, absolutely out of proportion to the benefits obtained for financial stability purposes. The Associations therefore advocate the completion of the EBA mandate so that the Authority can define, together with other aspects, recommendations aimed at reducing the reporting requirements.
Another area of interest is the rules on remuneration. Despite being relevant only to a limited number of large banks, these complex rules must be applied by all credit institutions in equal measure, with the huge burdens that arise in terms of time and resources committed.