“Community banks and local banks: can the gap on both sides of the Atlantic be bridged?”. Certainly the question of the title helps to increase the curiosity of the potential reader to discover the path outlined by the author Rainer Masera to illustrate a comparative examination of the difference in approach between the two sides of the Atlantic in the regulation of local banks.
A curiosity, punctually satisfied by the analysis contained in this small book, but full of bibliographic references and embellished with an effective Preface by Ignazio Visco, Governor of the Bank of Italy. In fact, in a rationally persuasive manner, Masera, an academic and fine student of banking economics with solid experience as a central banker, reveals the reasons for his siding among those who support the thesis of an application of the principle of proportionality in legislation for the benefit of local banks and those with a marked territorial vocation.
A choice of field which, in the light of the experience gained in the USA which is widely discussed in the pages of this volume, is rewarding not only for the individual banks, but also, more generally, in terms of valorising local economies and of the small-medium enterprises sector to which the local banks belong. This choice of field could crack in the near future in the new scenario outlined by theimpetuous entry of Fintech, i.e. the factor of technological innovation, in the financial world? Masera's answer is definitely negative, also by virtue of the first application results of the new technologies.
On the basis of these considerations, therefore, the orientation assumed on this side of the Atlantic is difficult to justify; an orientation, conditioned by the application principle of a uniform regulation, which registers an almost compact membership of the countries of the Eurozone, with the exception of the opposing positions hitherto expressed, more decisively, by Germany and, more timidly, by Italy and Austria.
And, as if that were not enough, according to the Author, the behavior of the European regulators leaves open two other problematic aspects of no less importance (and for which the identification of an adequate solution seems urgent) to which some reflections are dedicated in the concluding pages .
The first of the two aspects concerns the unfavorable treatment for local banks, connected to the prudential approach tested so far in terms of "non-marketable" lending activities, with the consequence of an increase in resources to be allocated tofurther strengthening of the banks' capital, to the detriment of those to be introduced into the economic circuit.
As for the second aspect, the undesirable effects of morphological modification of the financial market need to be assessed, following the new European legislation, inspired by a protection strongly unbalanced in protecting the retail investor from risk. A regulation which is in fact altering and, in some ways, penalizing the ability of local banks to have a widespread shareholder base.
Ultimately, these two problematic aspects push further in the direction of adopting, even on this side of the Atlantic, the principle of regulatory proportionality towards small banks. A prospect, which also appears to be indispensable for improving the level of competitiveness of the "European System" against its fierce US competitors.
