Le EBA decisions “have generated pernicious effects and represented a powerful fuel in the crisis of confidence resulting from the turbulence of sovereign markets". This is the opinion of Giuseppe Mussari, president of Abi, heard today in the House Finance Committee. In particular, the banker referred to the "substantial and immediate application of Basel 3 and the application of mark-to-market to sovereign exposures held in the banking book".
Mussari then underlined that envisaging "a Core tier1 ratio of 9% is roughly analogous to a Common equity ratio of 7%, as envisaged by the Agreement starting from 2019". And in these conditions “it is legitimate to expect that the potential recessionary effects connected to the Basel 3 regulatory process have grown".
For these reasons, the number one of the ABI underlined that the association "is considering the opportunity to appeal to the European Court of Justice against the Eba recommendation", which "constitutes in fact a modification of the supervisory rules currently in force, given that, for example, prudential filters are removed".
In this way "an important constraint envisaged in the process of issuing laws and regulations in Europe has been circumvented - Mussari pointed out -, i.e. the preventive analysis of the impact of the regulation, which makes it possible to evaluate the costs and benefits deriving from the introduction of new regulations".
In short, "it must be hoped that, also at the instigation of the Italian government, there will be a modification of the decision of the European Council of 26 October as regards the methodology underlying the EBA recommendation, or at least a postponement of the date now envisaged for its implementation”, i.e. 30 June.
