As early as 2012, with the entry into force of the provisions related to Basel 3, a tough confrontation began between the representatives of the banks of the most advanced countries and the international credit regulatory authorities regarding a possible new regulatory tightening aimed at further strengthening the system of safeguards against banking risks.
It would be the umpteenth regulatory shock imposed on European banks in the last 15 years, after Basel 2 and 3, the introduction of the Single Supervisory Mechanism, the crisis resolution system and the Bail-in, the provisions on governance and those on the transparency of financial services. Considering that each new regulatory system generates significant impacts on the internal organization of intermediaries, requiring a lasting commitment in terms of costs and use of resources, it is easy to assume what the effects will be on the income statements and profitability of the sector.
At the beginning of August, the confrontation gave rise to a formal request made by the major European, American, Canadian and even Japanese banks – supported by their respective trade associations – to international regulators and central banks. The event is of considerable value, as never before has there been such a broad and widespread international position by the banking industry, which in fact stands in a united way against the possibility of a Basel 4 .
The banks' request has the objective of ending the condition of permanent regulatory uncertainty which hinders, among other things, corporate investment and capital strengthening programmes. The most important concern, however, is to avoid further tightening of prudential requirements, which would inevitably cause a new credit crunch, with ruinous effects on the prospects for the recovery of the global economy.
The target of the banks is the Basle Committee, i.e. the supranational body charged with rewriting the rules on credit, which are then transformed into ordinary laws by EU and national legislators. It is an eminently technical body, exclusively committed to strengthening the resilience of banks and therefore not interested in the repercussions of its regulatory proposals on credit and the economy.
In the first place, the banks fear the effects of a possible request for capital requirements that are even more stringent than the current ones, which would make the already rather fragile profitability conditions of the sector problematic.
There is a further aspect, however, which gives rise to specific concerns for the economy of our country. In fact, the Basel Committee plans to impose on banks the use of standardized models to qualify the creditworthiness of a counterparty requesting credit, denying the use of internal assessment models currently in use, calibrated on the basis of specific targets of customers of individual intermediaries.
This change can be very penalizing, especially for companies that do not have a company rating, or for most small and medium-sized companies. The new standard, in fact, would force a bank intending to grant credit to an SME to set aside a much higher amount of assets than in the past and consequently the conditions of convenience of the loan itself would worsen.
A somewhat paradoxical situation therefore envisages which sees the promotion of restrictive regulatory measures in a still weak macroeconomic context, in which maximum stability of credit would instead be necessary in favor of the economy. In the current phase, in fact, having perhaps overcome the emergency but certainly not the crisis, it is essential to shift attention from prudential measures to protect the credit system to measures capable of stimulating growth; this at least until the economy is steadily moving. Also because there is a risk of canceling the propulsive action of the ECB with the consequence that, at least in Italy, the beneficial effects on our companies could last for a very limited time.
