25 June 2013

EBF: Europe's banks committed to long-term financing

In its response to the Commission's Green Paper on the Long-term Financing of the European Economy, EBF highlighted that the role of banks as an intermediary between lenders and borrowers is an essential economic function.

“Long-term financing is key for supporting structural economic change and a return to growth. Thanks to their skills, relationships and extensive networks, banks are well-equipped to accompany households and businesses for the longer term”, said Guido Ravoet, Chief Executive of the EBF.

The EBF also supports the further development of a market-based structure in addition to bank-based financing. Particular attention could be given to reliable securitisation which, like covered bonds would allow banks to lend afresh to the economy.

The EBF is, however, concerned that a number of regulatory proposals currently on the table (e.g. FTT, the Liikanen proposal, etc.) may end up limiting banks’ ability to finance the economy in the longer term. “Despite our repeated calls, there still has not been a proper impact assessment of all regulatory measures”, commented Ravoet. This is why we believe that introducing further regulation at this stage is not advisable. We are not opposing any further measure per se. We simply need to know exactly where we stand first.”

Europe’s banks are in the process of adapting to a changing regulatory landscape that profoundly affects their role. In addition they have to operate in an economy that is characterised by weak consumption and investment. Moreover, the EU economy faces strong competition abroad.

For Europe’s banking industry, the challenge of the future is to make use of its capacity to commit large volumes of financial support over longer periods. The sector must also further develop skills, techniques, and global reach, in new ways, so that it continues to play a central role in fuelling economic activity.

Press release

Response to the Green Paper

© EBF