Mark Branson, President of the Financial Supervisory Authority Bafin, has clearly opposed a reduction of capital requirements for banks.
Stability through Strong Capital Buffers
He emphasizes that despite the desire of many players to increase competitiveness, savings must not be made on the safety buffers that banks have built up. Capital and liquidity are essential for the stability of the financial system, especially since liquidity is lost most quickly in times of crisis. Europe has undertaken a lot since the financial crisis to make its financial system more resilient – this strength must not be jeopardized.
Unequal Perspective on the USA
Branson also points out that it is a misconception to believe that US banks have softer capital requirements than European institutions; in fact, the USA starts from a higher starting level. Therefore, no compromises should be made regarding European capital requirements.
Relevance for Savers and Investors
This position is particularly relevant for savers and investors: stable banks with sufficient capital buffers are a fundamental element for financial security and trust in the banking system as a whole. A reduction in capital requirements might suggest competitiveness in the short term but would increase risks in the long term, potentially jeopardizing the assets of savers and investors.
Simplification Without Risk
Additionally, Branson calls for a simplification of regulation by reducing unnecessary complexity in Europe’s rulebooks – without compromising on safety standards.