Trento, Sepember 26 2012<\/p>\n
Good news for European cooperative banking. After the European Banking Authority, now the European Commission, represented by the Commissioner responsible for internal market and services, Michel Barnier<\/strong>, has also responded positively to the appeal launched by Euricse in March, demanding that EU institutions pay more attention to local and cooperative banks. The appeal<\/strong> (download it here<\/a>) emphasized the role that these institutions can play in diversifying the credit market and supporting the real economy, and warned legislators against the excessively simplified and standardized vision supported by recent regulatory frameworks such as Basel III<\/strong>.<\/p>\n In his response (download his full reply here<\/a>), Commissioner Barnier recognized, on behalf of the European Commission, \u201cthat cooperative banks [\u2026] more than other types of banks have provided important protection during the financial crisis and have continued to supply credit to the real economy.\u201d The Commission is therefore \u201cconvinced that a diversified European banking scene, with banks of different sizes, with different business models and governance structures, is a point of strength and not weakness. For this reason, during the negotiations around the Basel III agreements, it has always taken the impact on cooperative banks into consideration.\u201d<\/p>\n He listed measures that had already been taken: \u201cFor example, the possibility of excluding intra-group exposures and giving exemptions on capital requirements to individual institutions when they are part of a group within the same member state. This measure will contribute to ensuring that cooperative banks do not find themselves in a position of competitive disadvantage compared to other types of banks.\u201d<\/p>\n The strictest regulations that European banks are facing during this period \u201cmust not be implemented at the expense of those banks that did not cause the crisis, nor at the expense of the competitivity and fairness of our single market. I am convinced that this is recognized in our CRD 4 [Capital Requirements Directive] proposal, and we will continue to keep in mind this objective during the on-going negotiations.”<\/p>\n Carlo Borzaga, the president of Euricse<\/strong>, was satisfied with the significance and conviction behind the response. He attributed the success of the appeal not only to the fact \u201cthat it was signed by a large number of highly qualified exponents of the world of cooperation and research,\u201d but also and \u201cabove all to the fact that its contents are based on research and communication activities that Euricse has pursued with great commitment<\/strong>.\u201d Borzaga continued: \u201cThrough studies, scientific conferences and, not least, discussion forums with practitioners in the sector, we have generated a scientifically reliable body of knowledge, able to be activated to help orient development policies.\u201d<\/p>\n Given the importance of the speakers and the content of their declarations, Barnier\u2019s response was also officially commented upon by Giovanni Ferri<\/strong>, professor of political economics at the University of Bari, and Sergio Gatti<\/strong>, the director of Federcasse<\/strong>, both among the signers of Euricse\u2019s appeal.<\/p>\n Giovanni Ferri<\/strong> also believes that \u201cit is comforting to hear that the European Commission, with perhaps unprecedented force, is speaking clearly about its attention towards cooperative banks.<\/strong>\u201d But he underlined that \u201cdespite this, it is necessary to take concrete and rapid action,\u201d because, \u201cthe truth is that the starting structure of Basel III has completely failed to recognize the importance of cooperative banks\u2019 business model as the best safeguard to anchor finance to the real economy and to avoid the formation of enormous financial risks.\u201d This means that despite the praiseworthy proposals, \u201cthe majority of cooperative banks are experiencing a growing weight of regulations, including a significant increase in compliance costs which could inadvertently cause mergers induced by the regulations, which could intensify the administration problems within the cooperatives themselves.\u201d(download here the full comment of prof. Ferri<\/a>)<\/p>\n Sergio Gatti<\/strong>, the director of Federcasse<\/strong>, the Italian federation of cooperative banks, also commented, saying that \u201cthe points recalled by Barnier are certainly relevant, but still not sufficient.<\/strong>\u201d Specifically, \u201cthe distinctive features of cooperative banks and their network-style organization are still not properly recognized<\/strong> in the current versions of the CRD 4 [the new proposals for an EU Capital Requirements Directive] in the CRR 1 [Capital Requirements Regulation]. Some regulatory limits could potentially discriminate against cooperative banks and their network, with potential negative effects on the specific governance model of both individual banks and the whole system, and the business. From our point of view (shared by other European cooperative banking systems), one of the most important deficiencies in the Commission\u2019s proposals, beyond the sometimes inadequate evaluation of the implications of the legal and business model of cooperative banks, is the apparent undervaluation of cooperative network systems (horizontal networks) and the role that they assume or can assume in contributing to a better everyday management of individual banks, in the support provided at critical moments and in carrying out specific interventions.\u201d (Download here the full comment of Sergio Gatti<\/a>)<\/p>\n Gatti closed with an exhortation: \u201cWe can only continue to trust Michel Barnier\u2019s assertions<\/strong> and we will never tire of reminding him of this letter to Professor Borzaga. Banking biodiversity<\/strong> cannot be weakened and the mutual credit that has created new horizons for millions of Europeans cannot be denatured by a regulatory plan that does not give coherent and concrete value to the value of popular participation.\u201d The big risk is that the emergency legislation the EU is putting into action does not respect this banking biodiversity: \u201cidentical (and rushed) rules for different subjects will not increase the level of financial stability. Quite the opposite.\u201d<\/p>\n