Banking employers identify six urgent measures to lighten the regulatory burden of the sector

Spanish banks reinforce the need to streamline the regulation of the sector. The Spanish Banking Association (AEB), the Spanish Confederation of Savings Banks (CECA) and the National Union of Credit Unions (UNACC) – the employers’ associations of the sector at the national level – have presented a block with six proposals that seek to simplify the regulatory framework that supervises the financial sector. Among them, the first two are focused on simplify the macroprudential framework in order to avoid overlaps, as well as reduce the complexity of the regulatory technical standards of national supervisory authorities.

The third is aimed at aligning the supervisory framework with greater transparency and “rationality” on additional capital buffers derived from inspections, in addition to avoiding the use of supervisory guides as a tool to toughen regulators’ decisions. The employers consider that the supervisory area should be more “coordinated”, statements that they argue under the protection of the number of regulations approved in the last five years. According to the data provided, the entities have had to face 1,755 regulations per year, which represents 1.3 regulations per day. Of them, almost 1,400 are within the European Union.

Likewise, the sector has also requested a review of the minimum requirements for own funds and liabilities under MREL, the minimum capital required of banks to face future crises, while the fifth urges to promote legislative harmonization throughout the European Union. Finally, regarding the digital euro, representatives of the sector believe that strategic autonomy in payments can be achieved in a “simpler and more cost-effective way” in the heat of instant payments.

Although that the current regulatory structure has worked during the last economic recession, which has resulted in “a financial system you can be proud of,” the senior director of CECA Operational Efficiency and Cooperation, Paz Navarro, sees it advisable to move forward and update the real situation with the implementation of new measures and stop using traditional capital requirements to mitigate risks.

In total, they have presented a report with 24 initiatives that are grouped into these six blocks and that aim to reduce the regulatory burden they bear. financial entities from a financial point of viewas well as in digital or sustainability matters. With this they seek to improve the competitiveness of both Spanish and European banks. “We need a financial system capable of financing billion-dollar investments in energy transition, digitalization, defense, security or reindustrialization,” commented the president of AEB, Alejandra Kindelán.

In the same line, Maria Abascalpresident of AEB, has highlighted that banks have managed to recover profitability, with metrics that are above the cost of capital and an ROE ratio that, on average, reaches 14%, and allows them to compare with Europe. In this sense, investments in digitalization stand out, which have allowed the financial sector to take the lead in Europe and boost the efficiency ratio – the lower it is, the better – to over 44%, ten points below the average for the Old Continent.