The coming months are expected to be very important for European banks and in particular promise to be demanding for the credit system of our country.
For Italy, in fact, there is a first and unavoidable 'task' to face, and it is the one linked to the Monte Paschi affair, for which the market solution seems increasingly difficult and the real possible alternative, in order to avoid further and heavier instability, that of public intervention, at least of a temporary nature, is expected. A possible default would represent a real disaster for the Italian banking system, which must be avoided, also in an attempt to normalize the financial markets in view of new and urgent needs for capital increases.
This last indication is linked to the management of the results of the Srep, in relation to which the consequent corrective actions are expected by the European Supervisory System chaired by Danièle Nouy, just as the new regulatory indications on the management of Non Performing Loans and on the risk associated with the holding of government bonds which, in both cases, see Italian institutions among those most exposed within the European financial system.
In this scenario, far from worrying, the controversial revision process of the system of prudential rules relating to the capital adequacy of banks, known as Basel 4, is about to end. It is expected that the agreement within the Basel Committee can be defined in the meeting to be held on 8 January.
The divergences are linked to the different positions of the European and American supervisors, bearers of a radically different vision of the weight of bank credit in favor of the economy, much higher in the countries of the European Union. Different positions are linked to this in relation to purely operational aspects of the regulatory framework, which involve the revision of the standardized approach, the modification of internal models (much more used in Europe) and the calibration of methods for measuring operational risk.
A more careful evaluation, therefore, reveals the true essence of the comparison, beyond the technical-specialist aspects of the regulation, showing a contrast of a political and competitive nature. In fact, the concrete possibility emerges that "one-size-fits-all" rules, i.e. those valid in the same way for banks of different sizes and operating models, could represent a significant competitive advantage for the large Wall Street groups, which could use them to conquer new market shares in Europe.
In this regard, in fact, it is rather difficult to understand how a bank that operates in the traditional intermediation sectors, with a clientele mostly represented by small and medium-sized businesses, artisans and families, can operate effectively by having to follow rules and principles designed to the regulation of the activity of global financial intermediaries, which operate on a stable basis on the capital markets, relying on their considerable size and resources.
The majority of European intermediaries are represented by traditional commercial banks with strong roots in the real economy, which often operate in a defined territorial context, and Italian banks qualify themselves even more decisively on these connotations.
The first hypotheses of a revision of the prudential regulation by the Basel Committee made European banks tremble, which reacted by involving the international representatives of the banking industry. Regulatory excesses conceived by an army of technocrats whose work appears to have gone far beyond the mandate given to them by the G20 after the subprime mortgage crisis have been blamed. In a letter sent last November 3 to the Secretary General of the Financial Stability Board, Svein Andresen, the International Banking Federation stated that "It is time to stop the regulatory process and carefully evaluate not only the results obtained in terms of system security, but also the effects and collateral damage of the rules already introduced and above all of those that would like to be approved with the revision of the system of prudential rules”. The rules must have as a point of reference not only the reduction of systemic risks affecting the market, but above all the revival of growth, the investment needs of businesses and the needs of families.
The Managing Director of the Federation, Hedwige Nuyens has clearly invited the G20 to stop the progress of the rules review program and to open a new discussion with the banking industry on the necessary changes in order to avoid the possibility of a new credit crunch , new generalized requests for forced capitalisations, as well as serious repercussions on the real economy of many EU countries.
Ultimately, it is important not to lower our guard against the Basel 4 revision process, and this despite the fact that we are moving towards a softer impact on banks and credit than the initial proposals. It should be considered that on these issues, even Danièle Nouy, the director of banking supervision in Frankfurt who stood out for her managerial imprint, recently joined the chorus of the Authorities who asked the Basel Committee for the utmost caution to avoid burdening the banks with further and unjustified calls for capital.
*Giuseppe De Lucia Lumeno is the Secretary General of the National Association of Popular Banks
