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BMF Ministerbüro
.- 19, September 2(

  
  
 
   

  

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FEDERATION nem
BANCAIRE = dene,
FRANCAISE =
Ba fe (33
Herrn Bundesminister a Ih Deda
Christian Lindner, MdB en. Dom

Bundesministerium der Finanzen IL.
Wilhelmstraße 97 N .
10117 Berlin 7

ä Ja .—-
French Banking Federation
Telephone: TAU RIENTT |

‚Bfbf,fr

Fostering an agile and truly European banking industry to EM Sa
Association of German Banks A
meet upcoming challenges Telephone: Hi ei Eu

here: Joint proposal by the French and German
banking associations for the DE/FR Summit Büro der Leit

LCB- AEUORR

Eingang 19. September 2022
Dear Mr. Lindner, 2022/0938114

 

We believe that more Europe must be the answer to funding 16 September 2022
solutions to the challenges of our time. While we will need huge
Investments to fight climate change (€330bn/year) and to
accelerate digitalisation (€125bn/year), new challenges arose in
2022 requiring even more financing capacity. Europe is facing
challenges that go to the core of European solidarity. The biggest is
linked to consequences of geopolitical happenings in front of
Europe, as this is altering economic and strategic priorities, and will
require a further increase in state and especially defence budgets,
as Germany recently illustrated. This links to rising energy costs
and possible energy supply shortage, as well as the high inflation.
Next to Ukraine, the healthcare situation is under constant
monitoring, especially in autumn and winter, the ongoing supply-
chain disruptions, labour shortage, regionalisation of global trade,
and the refinancing concerns for low-rated companies and highly
indebted countries. Efforts are also underway to re-industrialize
Europe and help achieve European strategic autonomy, as Covid
underlined the dependence towards sometimes unreliable regions.
At the same time higher interest rates will affect the corporate
world, simultaneousliy as a multi-year refinancing wave begins. The
volume of bonds maturing in the European High Yield sector in 2023
needing refinancing is expected to be 1/3 higher than this year.

Eingang im Büro

  
 

 

22. SEP. 2022

St Dr. Pillath

  
  

We need to build the basis for getting through 2023 and we have to
set the right course for the long term, both already starting now. To

meet this considerable demand for funding, public money is not

enough and the banking industry has a key. role to play in accelerating and financing the
required investment. Without an agile and powerful European banking industry, Europe will not
be in a capacity to meet the required green, energy and digital transitions we are urgently
facing. First of all, we need to prevent worsening the current situation, especially with
what is being proposed in the banking package, currently under negotiation:

- Ensuring the banking package addresses European specificities and does not
undermine the competitiveness of European banks. Key areas of concern are
lending to corporates and real estate, treatment of derivatives as well as level playing
field for market activities and strategic holdings. Targeted, permanent adjustments are
needed, especially regarding unrated corporates and residential real estate. To
acknowledge the gains of the Single Rulebook and the Banking Union, all the
requirements, including the Output Floor, should apply at consolidated level. We need to
free funding capakcities for the coming energy, climate and digital investments.

- Europe could become even more fragmented, as the new capital requirements could
vary from bank to bank, with an option to apply them at national level. This decision
would go against the creation of European financial market integration, which would
enable the free flow of capital and liquidity within the same banking group operating
across borders In Europe.

Secondly, we will need to unlock financing capacity by strengthening the European single
market for financial services as well as by completing Capital Markets Union in order to
better leverage the vast potential of European savings, which are not currently channelled
towards these long-term needs. In previous years, those savings have been more inclined to
finance US spendings or investments, thus been diverted from financing domestic purposes.
Additionally, according to a European study done by Copenhagen Economics, it was estimated
that the total potential cost savings for the European economy from a fully integrated
European banking market would amount to around €95bn per year.

It is true that banking market integration has made progress in the past by strengthening
the single rulebook and introducing the SSM. However, this progress is too slow. While we
believe that bold actions are needed, we understand that positions on certain desirable
measures (e.g. cross-border liquidity and capital waivers) have hardened. We therefore
propose - as a first step - concentrating on issues where quick progress is achievable.

From our point of view these feasible measures would foster the European financial market:

- Improving the regulatory treatment of securitisation: Securitisation is a bridge
between bank-driven financing and the funding resources of the capital market.
Furthermore, it can help diversify risks across Europe and thus help to achieve further
steps on the road to a true European single market. A review is due in 2022, but so far
there is little sign of a shift to a more risk-based approach.

Page2/4

- Recognising Banking Union as single jurisdiction in all its regulatory and prudential
components (especially with regard to Intra-group exposures). Indeed, it is critical that
further progress is made on reducing the fragmentation of capital, liquidity and MREL
and enhancing integration within the Banking Union. Calculations by ECB Banking
Supervision show the absence of liquidity waivers prevents around €250 billion of high-
quality liquid assets from being moved freely within the banking union. As far as capital
is concerned, the same calculations show that the overall amount of risk-weighted
assets resulting from the individual non-waivable requirements of cross-border
subsidiarles in the banking union is around 25% larger than the amount of consolidated
risk-weighted assets attributable to those subsidiaries at the consolidated level. Any re-
opening of the banking union shall be submitted to strict conditions of level-playing field
and bail-in for all countries and banks, whatever their size or statutes.

- Reducing national gold plating (i.e. directives as well as options and national
discretions); especially with regard to the European-only Other Systemically Important
Institutions (OSII) capital buffer; furthermore an increase of buffers in the current
context would be detrimental,

- Reducing complexity (i.e. no overlapping of regulations, reporting and responsibilities);
For example: The macro-prudential framework is far too complex, For banks the
management of the vast number of different buffers is too complex and for regulators It is
very difficult to find the right timing to activate the buffer. If the buffer is set at the wrong
time, it will have procyclical effects. Buffers like the Countercyclical buffer should therefore
be postponed until the economic outlook turns positive again.

- Fostering digitalisation e.g. by reviewing the prudential treatment of intangible

ı  assets.

Furthermore, we need to accelerate the push towards actual market-based funds, to
expand financing options.:

- European capital markets need to be globally competitive - The reaulatory framework
in which European firms operate in must provide a level playing field with global
competitors to access global liquidity pools. There are a number of areas to address:

- (i) the current regulatory framework limits EU banks in their ability to compete for
international clients and investments - greater acknowledgement and recognition of
international standards is needed to adjust for this,

- (ii) proposed measures to foster strategic autonomy, such as for CCP-cleared
transactions could result in penalising European banks and drive business outside the
EU and

- _(ili) the European regulatory framework is not flexible enough to react to changing
market environments - more agility in decision-making processes is needed to prepare
it for future challenges,

Page 3/4

Finally, it is key to avoid unnecessary sterilisation of capital which should be freed to finance
those urgent clients’ needs. Providing certainty that contributions to the Single Resolution Fund
after 2023 will be stopped when the 1% covered deposit by 2023 is reached is a striking
example of a quick win in this matter. As a reminder, the fund will reach at least €80 billion,
compared to the €55 billion envisaged by the European co-legislators.

While we understand that the full focus is on getting Europe through the current energy crisis,
sustainability transition and review of European corporate supply chains, we can’t make it more
clear that Europe needs a strong banking sector to support this. This means that Europe, led
by Germany and France, needs to act now on the afore mentioned issues.

This especially since we are very close to the end of the current European policy making cycle
with the EP elections on May 2024 and end of the EC mandate in Oct 2024. Europe can’t afford
“doing nothing” during this regulatory pause, which will likely last from mid 2023 to mid 2025.

France and Germany should work in cooperation, to define common positions and drive the
European agenda with utmost urgency, in order to avoid negative impact on the European
economy.

Yours sincerely,

  

 

Page4/4

Heinzmann, Stephanie (LCB)

Von: Vorzimmer LA

Gesendet: Freitag, 16. September 2022 17:11

An: Heinzmann, Stephanie (LCB)

Betreff: Gemeinsames FBF/BdB Schreiben zur Stärkung des europäischen Bankenmarktes
Anlagen: 2022_09_16_FBF_BdB position on strengthening the European banking market_BMF.pdf
M-Post

Beste Grüße

Nina Stremlau

 

Büro des Unterabteilungsleiters LA
Durchwahl: 4719°

Von: Hapke, Martina (M) <Martina.Hapke@bmf.bund.de>

Gesendet: Freitag, 16. September 2022 16:29

An: Vorzimmer LA <vzLA@bmf.bund.de>

Betreff: WG: Gemeinsames FBF/BdB Schreiben zur Stärkung des europäischen Bankenmarktes

Von: @bdb.dex @bdb.de>
Gesendet: Freitag, 16. September 2022 16:22
An: Lindner, Christian (M) <Christian.Lindner@bmf.bund.de>
Cc: Toncar Dr., Florian (PSt T) <Florian.Toncar@bmf.bund.de>; Büro PSt Toncar <BueroPStT@bmf.bund.de>; Pillath
Dr., Carsten (St P) <Carsten.Pillath@bmf.bund.de>; Vorzimmer St Pillath <VZSTP@bmf.bund.de>;
‚@db.com; @®bdb.de
Betreff: Gemeinsames FBF/BdB Schreiben zur Stärku ng des europäischen Bankenmarktes

Sehr geehrter Herr Bundesminister,

die Präsidenten des französischen und deutschen Bankenverbandes, SARA
15 „ sprechen sich in einem gemeinsamen Schreiben der Verbände für die dringend erforderliche
Stärkung des europäischen Finanzbinnenmarktes aus.

Europa steht vor großen Finanzierungsaufgaben, wie z.B. dem Kampf gegen den Klimawandel, der
Digitalisierung sowie der Stärkung der wirtschaftlichen Unabhängigkeit Europas. Diese werden wir nur
stemmen können, wenn wir jetzt die regulatorischen Weichenstellungen vornehmen, bevor der
aktuelle Regulierungszyklus mit der Wahl des Europaparlaments im Mai 2024 endet.

Wir plädieren für eine umfassende Marktintegration. Dazu erläutern wir im Schreiben die
Notwendigkeit vor dem Hintergrund der aktuell schwierigen Lage von weiteren Belastungen für die
Kreditvergabe durch die Umsetzung von Basel IV abzusehen und welche kurzfristig umsetzbaren
Maßnahmen ergriffen werden sollten, um den Banken- und den Kapitalmarkt für die Finanzierung der
Herausforderungen unserer Zeit zu stärken.

Wir stehen für einen gemeinsamen Austausch zu diesem wichtigen Thema bereit.

Mit freundlichen Grüßen

Tel: Ran }
Mobil: EN EURE,

ER EEERNRERbdb.de

Bundesverband deutscher Banken e.V. / Association of German Banks
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