Are the rules promoted by the Basel committee for banks really effective? This is the question asked by the banking sector operators who took part in the meeting recently held in London and promoted by the Center for the Study of Financial Innovation (CSFI). The question appears all the more timely if we consider that the Basel rules did not make it possible to avoid the 2008 crisis and that even today very often the problem of the stability of the financial system it also has political implications.
In fact, if the continuous requests to increase the capitalization of banking institutions, the invitation to reduce one's financial leverage and the need to have adequate liquidity available to deal with possible crisis scenarios are all recommendations that can be shared under the profile of securing and sustainable operations, one cannot, however, forget that the holding by banks of sovereign debt securities clearly has a political connotation which does not always coincide with what is required by the regulation. If we add to all this the problem deriving from a homogeneous and horizontal application of the new rules (without taking into account the specificities of the institutions involved and the economic and productive system in which these banks operate) and the increasingly significant doubts that China and the United States show to have on the implementation of the legislation promoted by the Basel committee, it is clear that the gap between what should be the final objective and the various parties involved, each with its own interests, is far from being bridged.
As proof of the difficulties just mentioned, it is sufficient to recall how the introduction of the Bail-In to avoid taxpayer-financed bank bailouts is in any case subject to national political assessments from which the final decision derives, or the fact that within the regulation there is a different weight in terms of risk to derivatives compared to problem loans which tends to favor Northern European institutions more dedicated to speculative financial activities rather than those that implement an intermediation policy in favor of territories and SMEs, or, finally, the different perimeters within which ECB supervision operates in the new banking union, with the German Landesbanks exempted and still subject solely to the supervision of the Bundesbank.
A long road still has to be travelled, a road that must not lead to a homologation of the European banking panorama, with the idea that only a single type of intermediary, that of the joint stock company and of large dimensions, is accredited to be able to face the future challenges deriving from technological evolution in the best possible way. On the contrary, it is precisely by preserving and enhancing biodiversity in the banking sector, guaranteeing operations to large groups, medium and small banks, joint stock companies or cooperatives that it will be possible to support a broad spectrum demand, also diversifying the risks and dangers of unexpected crises. Biodiversity taken into due consideration in important credit realities such as those of France and Germany and instead, unfortunately, partially compromised in our country as a result of political choices whose consequences have not been fully evaluated. If the next steps in the Basel regulation will be able to take these aspects into account and promote and enhance the specific features of individual institutions, then without a doubt the stability and sustainability much sought after for the European banking system can be more easily achieved and maintained.
°°°° The author is the Secretary General of the National Association of Popular Banks (Assopopolari)
