{"id":4551,"date":"2024-03-06T07:14:00","date_gmt":"2024-03-06T05:14:00","guid":{"rendered":"https:\/\/www.fbf.fr\/en\/?p=4551"},"modified":"2025-03-04T19:46:52","modified_gmt":"2025-03-04T17:46:52","slug":"for-a-sovereign-and-sustainably-growing-europe-proposals-from-french-banks-for-the-2024-2029-term","status":"publish","type":"post","link":"https:\/\/fbf.fr\/en\/for-a-sovereign-and-sustainably-growing-europe-proposals-from-french-banks-for-the-2024-2029-term\/","title":{"rendered":"For a sovereign and sustainably growing Europe: proposals from French banks for the 2024-2029 term"},"content":{"rendered":"\n
There are many challenges in a world undergoing profound change \u2013 a world that is evolving ever faster, with strong competition and considerable issues to be tackled for the ecological and digital transitions. Faced with growing investment needs, Europe must take control of its own destiny, and the strength of its banking sector will enable it to do so. Banking is a strategic sector for achieving sustainable growth and financing the decarbonisation of the economy, digitalisation and major projects.<\/p>\n\n\n\n
To translate this into concrete measures, French banks are setting out their proposals for the European Union\u2019s next term of office, broken down into three main priorities.<\/p>\n\n\n\n
1. Finance future needs of households and businesses with high-performance tools<\/h2>\n\n\n\n
Develop investment through European savings and the strengths of the European universal banking model.<\/li>
Capitalise on private initiatives such as the European Payments Initiative (EPI) by guaranteeing the transformation activity of the European banking sector.<\/li>
Free up capital to finance the economy by enabling the development of an efficient and secure securitisation market in Europe.<\/li><\/ul>\n\n\n\n
PROPOSALS<\/strong> 1 \u2013 Develop the European universal banking model and its strengths, as well as free competition between different distribution models, as part of the retail investment strategy. 2 \u2013 Simplify and reduce the amount of documentation provided when selling financial products, which complicates the sale process and discourages retail clients, as part of the retail investment strategy. 3 \u2013 Ensure that a high level of security is maintained in the protection of customer data by imposing uniform security requirements on all players in the chain. 4 \u2013 Ensure the long-term development of the bancassurance model in Europe by confirming the Danish compromise on the calculation of banks\u2019 capital requirements for their investments in insurance subsidiaries. 5 \u2013 Establish European payment sovereignty by relying on the European Payments Initiative and instant payments, in order to maintain banks\u2019 transformation activity, which is essential to meeting the European economy\u2019s financing needs. 6 \u2013 Develop the market of loans transfer by removing regulatory obstacles: \u2022 allow for prudential relief, in particular by halving the p-factor for STS (simple, transparent and standardised) securitisations, as in the Boyer amendment, and for non-STS securitisations, which account for 70% of the market (CRR revision); \u2022 simplify the European Central Bank\u2019s \u201csignificant risk transfer\u201d process (CRR revision); \u2022 make securitisation tranches eligible as level 1 HQLA assets (revision of the LCR delegated act); \u2022 ensure that European banks have the ability to invest in transactions originating in third countries by not applying the reporting rules of the European STS regulation to third-country originators (ESMA position).<\/p>\n\n\n\n
2. Boost the European banking sector, a guarantee of economic and industrial sovereignty<\/h2>\n\n\n\n
Facilitate capital and liquidity movements within the Banking Union.<\/li>
Ensure the economic strengthening of European banking players, whose competitiveness must become a priority for the single supervisor and the European authorities.<\/li>
Plan a qualitative approach in the context of the relocation of euro derivatives clearing to the EU to immunise companies in their hedging activities.<\/li><\/ul>\n\n\n\n
PROPOSALS<\/strong> 7 \u2013 Recognise the Banking Union as a single jurisdiction across all these prudential components (capital, liquidity, MREL) (CRR revision). 8 \u2013 Implement a reasonable threshold for eligibility for internal MREL for banking entities in Europe (revision of Implementing Regulation 2018\/1624). 9 \u2013 Introduce a second objective, the competitiveness of the sector, in the Regulation of 15 October 2013, which sets out the ECB\u2019s objectives for the prudential supervision of credit institutions, and specify the objective provided for in the regulations of November 2010 establishing the EBA, ESMA and EIOPA. 10 \u2013 In the event of resolution, the recapitalisation and MREL amount should be based on the size of the group after resolution and on the recovery options (BRRD review underway). 11 \u2013 Forbid the use of national guarantee funds to facilitate access to the Single Resolution Fund, as this creates a moral hazard (BRRD review underway). 12 \u2013 For all European banks, specify a reasonable MREL with a minimum recapitalisation amount (RCA) (BRRD review underway). 13 \u2013 Ensure that the future macroprudential framework does not result in higher capital requirements for banks by seeking in particular to cover other players, allow the enhanced use of buffers and provide clarity on the risks covered by each buffer to avoid overlap. Base any strengthening of the prudential framework on a robust vulnerability analysis and avoid placing European banks at a competitive disadvantage relative to non-European banking and market finance players. 14 \u2013 To keep regulatory constraints stable at the current high level of consumer protection, there is no need for a systematic review of legislative texts at predetermined periods in the interest of legislative restraint and there is, in particular, no need for a mortgage review. 15 \u2013 In the context of the relocation of euro derivatives clearing to the EU, make sure that companies are covered by European banks at the best price by prioritising a qualitative \u201cactive account\u201d approach, followed, if necessary, by a quantitative approach, the parameters of which will be decided at Level 1 as part of an ordinary legislative procedure.<\/p>\n\n\n\n
3. Contribute to the success of the ecological transition<\/h2>\n\n\n\n
Break down European environmental objectives into target trajectories by sector to enable companies to establish a transition plan and ensure their competitiveness<\/li>
Involve European stakeholders by favouring disruptive technologies short on maturity but strong on potential<\/li>
Simplify the regulatory framework and the collection of material non-financial data in Europe<\/li><\/ul>\n\n\n\n
PROPOSALS<\/strong> 16 \u2013 As part of the revision of the EU Taxonomy, set science-based target trajectories, at European level, for each business sector and align them with the EU\u2019s environmental commitments. 17 \u2013 As the USA has done with the Inflation Reduction Act, we need to consider: \u2022 increasing public\/private risk-sharing financing mechanisms (such as effective counter-guarantees for banks) to facilitate the long-term financing of disruptive technologies with as yet unproven commercial (and therefore financial) viability; \u2022 implementing commercial support mechanisms to provide investors and future lenders with long-term visibility, as long-term sales contracts with fixed prices and volumes (offtake agreements) are essential and have proven effective in supporting the acceleration of solar and wind projects. 18 \u2013 Harmonise European texts to align the obligations of financial players with those of their non-financial customers with respect to the materiality condition.<\/p>\n\n\n\nEuropean priorities<\/figcaption><\/figure>\n\n\n
For a sovereign and sustainably growing Europe: synthesis of the proposals from French banks for the 2024-2029 term (PDF)<\/p>
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