Zürcher Nachrichten - ECB pushes back against calls for looser bank rules

EUR -
AED 4.127425
AFN 79.221816
ALL 98.719773
AMD 436.096178
ANG 2.011113
AOA 1030.458576
ARS 1264.216617
AUD 1.731721
AWG 2.02552
AZN 1.913303
BAM 1.978295
BBD 2.267919
BDT 136.471842
BGN 1.960051
BHD 0.423541
BIF 3299.265644
BMD 1.123728
BND 1.466091
BOB 7.761359
BRL 6.308047
BSD 1.123288
BTN 95.811769
BWP 15.334093
BYN 3.675949
BYR 22025.070373
BZD 2.256266
CAD 1.563252
CDF 3226.223216
CHF 0.939459
CLF 0.027541
CLP 1056.866107
CNY 8.097978
CNH 8.089881
COP 4732.861742
CRC 570.798252
CUC 1.123728
CUP 29.778794
CVE 111.389579
CZK 24.934387
DJF 199.708983
DKK 7.459672
DOP 66.187401
DZD 149.654717
EGP 56.650612
ERN 16.855921
ETB 149.564786
FJD 2.53671
FKP 0.846333
GBP 0.842077
GEL 3.079374
GGP 0.846333
GHS 14.299431
GIP 0.846333
GMD 80.907899
GNF 9725.866387
GTQ 8.636204
GYD 234.998015
HKD 8.766377
HNL 28.958707
HRK 7.533585
HTG 146.86195
HUF 404.243759
IDR 18586.350075
ILS 4.002946
IMP 0.846333
INR 95.894688
IQD 1472.083785
IRR 47308.95239
ISK 145.713905
JEP 0.846333
JMD 178.944808
JOD 0.797173
JPY 164.323932
KES 145.24132
KGS 98.270188
KHR 4516.262872
KMF 495.005489
KPW 1011.383911
KRW 1568.982799
KWD 0.34531
KYD 0.936027
KZT 570.949652
LAK 24295.000867
LBP 100629.8496
LKR 335.677034
LRD 224.324282
LSL 20.597333
LTL 3.318076
LVL 0.679732
LYD 6.197367
MAD 10.45669
MDL 19.633911
MGA 5039.920138
MKD 61.523124
MMK 2359.135491
MNT 4020.301939
MOP 9.016468
MRU 44.500752
MUR 51.859743
MVR 17.361736
MWK 1950.79217
MXN 21.761916
MYR 4.829805
MZN 71.817273
NAD 20.597404
NGN 1801.100306
NIO 41.325094
NOK 11.566759
NPR 153.293715
NZD 1.886133
OMR 0.432641
PAB 1.123253
PEN 4.11425
PGK 4.576663
PHP 62.689433
PKR 316.610381
PLN 4.246012
PYG 8970.120318
QAR 4.090938
RON 5.104646
RSD 118.569858
RUB 90.339744
RWF 1595.693874
SAR 4.215049
SBD 9.395884
SCR 15.986822
SDG 674.793662
SEK 10.878711
SGD 1.457846
SHP 0.883074
SLE 25.565211
SLL 23564.01622
SOS 642.211833
SRD 41.016595
STD 23258.902464
SVC 9.828897
SYP 14610.380088
SZL 20.597676
THB 37.349316
TJS 11.647741
TMT 3.938667
TND 3.396467
TOP 2.631885
TRY 43.568444
TTD 7.622713
TWD 33.943891
TZS 3029.012918
UAH 46.680838
UGX 4110.799388
USD 1.123728
UYU 46.91346
UZS 14535.422542
VES 104.44601
VND 29149.506402
VUV 134.990964
WST 3.133593
XAF 663.489834
XAG 0.034221
XAU 0.000347
XCD 3.036931
XDR 0.825533
XOF 646.716307
XPF 119.331742
YER 274.695652
ZAR 20.458144
ZMK 10114.896444
ZMW 29.765869
ZWL 361.839983
  • RBGPF

    0.8100

    63.81

    +1.27%

  • GSK

    -0.0950

    36.255

    -0.26%

  • BP

    -0.1700

    30.39

    -0.56%

  • VOD

    -0.0400

    9.02

    -0.44%

  • RIO

    -0.1600

    62.11

    -0.26%

  • RYCEF

    -0.0200

    10.68

    -0.19%

  • NGG

    0.2100

    67.74

    +0.31%

  • BTI

    -0.2320

    40.458

    -0.57%

  • AZN

    -1.1600

    66.56

    -1.74%

  • SCS

    -0.1600

    10.55

    -1.52%

  • BCC

    -1.2300

    92.48

    -1.33%

  • BCE

    -0.6400

    21.34

    -3%

  • CMSD

    -0.0800

    22.31

    -0.36%

  • JRI

    -0.0820

    12.798

    -0.64%

  • CMSC

    -0.1100

    21.95

    -0.5%

  • RELX

    0.6900

    53.09

    +1.3%

ECB pushes back against calls for looser bank rules
ECB pushes back against calls for looser bank rules / Photo: Kirill KUDRYAVTSEV - AFP

ECB pushes back against calls for looser bank rules

The European Central Bank has pushed back against calls to loosen rules for eurozone banks despite fears they could fall behind US rivals if President Donald Trump implements major deregulation.

Text size:

Patrick Montagner, one of the ECB's banking regulators, told AFP in an interview that financial watchdogs "must always take a prudent approach to banking".

"The banking sector can, by its very nature, cause a lot of instability," said Montagner, whose watchdog oversees more than 100 of the euro area's biggest lenders, from Deutsche Bank to BNP Paribas and UniCredit.

Trump's return to the White House has fuelled expectations among major US banks of lighter regulation, and he is seen as likely to scale back the confrontational approach of Joe Biden's administration.

Changes are already afoot. Last week Trump tapped Michelle Bowman to be the Federal Reserve's top banking regulator, choosing a vocal critic of efforts to impose tougher rules in response to the 2007-2009 global financial crisis.

Such moves in the world's top economy will likely fuel calls for deregulation from European lenders, who had already been complaining frequently that stricter rules were undermining their ability to compete with US peers.

But Montagner said that if calls for "simplification" of regulations effectively meant "removing certain rules to the detriment of the resilience of the banking system, this does not align with our approach".

The member of the ECB's Supervisory Board pointed to the "massive cycle of deregulation" from the late 1990s to the mid-2000s, which ultimately triggered the "global shock" of the financial crisis.

The crisis began with a collapse of the US housing market, followed by the failure of banks and other businesses, and ultimately a major global downturn that the world economy took years to recover from.

- Banking rules stall -

Still, Montagner conceded it was ultimately not his call to set rules for the eurozone banking system -- that is up to European lawmakers.

There have been other warning signs about overly loose regulation in recent times, he said, pointing to the failure of US lender Silicon Valley Bank in 2023, which sent shock waves through the banking system.

"Regional banks were plunged into a severe crisis, with federal intervention required to stop it," he noted.

But his comments come at a time efforts to implement tougher global banking rules -- the so-called Basel III agreement, which came in response to the financial crisis -- already appeared to be stalling.

The US Federal Reserve has watered down its plans to implement the regulations after heavy pressure from the financial sector.

The European Commission, the EU's executive arm, has also delayed bringing in the rules until at least 2026 while the Bank of England has postponed them to the start of 2027.

The commission, under pressure to boost the eurozone's sluggish growth, is set to publish a report next year on the banking system in the single market, including on its competitiveness.

Montagner said the ECB was ready to contribute, while stressing financial sector regulations were not behind the euro area's economic woes.

"Economic forecasts have deteriorated recently owing to the prospect of a trade war and other geopolitical factors -- but not because of excessive banking regulation," he said.

L.Zimmermann--NZN