„A regulatory pause could help“
Engin Eroglu is a member of the European Parliament for the Free Voters of Hesse and a member of the Economic and Monetary Affairs Committee, which is important for financial policy. He advocates not adopting any new EU directives and regulations in the next legislative period. „Overall, we should take a break from regulation,“ says Eroglu talking to Börsen-Zeitung.
For years, EU legislators have been constantly tinkering with the regulation of the financial markets without waiting for implementation. „A regulatory pause“, the member of the European Parliament from Schwalmstadt in Hesse is convinced, „could really help companies in the EU.“
Advice from in-house counsel required
The regulatory requirements should not overburden companies. „But they do now – simply because of their quantity and complexity,“ criticizes the graduate banker and savings bank businessman. In some cases, this means that managing directors no longer fully understand their own business model and have to consult their in-house lawyers or compliance officers first when making more and more business decisions. „That should not be the case,“ emphasizes Eroglu.
The EU should use the regulatory pause to calmly look at how existing regulations are working before constantly tightening them further. „And we should also look at the extent to which other countries, particularly the USA, have implemented the Basel capital requirements in national law.“
Fear of European banks being sold off
Where the USA, for example, has been too negligent, European legislators should take appropriate action. Otherwise, local banks would be at a serious competitive disadvantage. „Or to put it another way: the banks in Europe could be sold off.“ However, the autonomy of European financing of the economy must not be jeopardized.
The vice-chairman of the Free Voters in Germany, who is second on the list and has a good chance of becoming a member of the next EU Parliament, points out that the basic idea behind the Basel requirements is to reduce risks for the financial sector. „What we see in practice, however, is that some types of bank investments, especially government bonds, are highly favoured by regulators,“ criticizes Eroglu.
This is obviously politically desirable in many EU countries – nevertheless, the mispricing of the risks of government bonds in banking regulation means a reinforcement of the sovereign-bank nexus and political steering towards more risk. „We must put an end to this,“ emphasizes Eroglu.
Customer relationship more bureaucratic
One financial policy issue that particularly concerns him is the relationship between bank and customer. „In recent years, we have made the customer relationship between financial service providers and customers increasingly bureaucratic,“ regrets the European Parliament member. The Retail Investment Strategy will reinforce this trend, even if the original far-reaching considerations have now been abandoned.
The Economic and Monetary Affairs Committee recently agreed to a position for the final talks with the Council that no longer provides for a partial ban on commission. „We are on the wrong track with the increased bureaucratization of the customer relationship,“ says Eroglu.
