Noticias

Publicado por Agence Europe (26 febrero 2010).

(EU) EP/FINANCIAL SERVICES: Christian Noyer opposes idea of an EU list of too-big-to-fails

At a public hearing on Thursday 25 February on financial supervision, organised by the European Parliament's special committee on the financial crisis, the governor of the Bank of France, Christian Noyer, opposed the idea of an EU list of “too-big-to-fail” financial institutions. He said that everyone wanted to reduce or remove moral risk but he had huge doubts about the drawing up of a list of too-big-to-fails as it could be counter-productive and increase moral risk by providing such institutions with a type of insurance policy. Too-big-to-fails are not necessarily the biggest institutions. Noyer said that the economic crisis had shown that many institutions that had to be bailed out would not have been on such a list.
In his draft report on the European supervision authority (ESA) that is soon to be set up for banking, José Manuel García-Margallo y Marfil (EPP, Spain) suggested that the banking ESA should have the power to supervise too-big-to-fail banks operating in more than one EU country, identified using criteria laid down by FSB and BRI (international organisations).

Noyer called for greater protection of savings in financial crises. At EU level, he called for “harmonisation” of the size of national savings guarantee funds and how they operate, in order to move towards a genuine EU savings guarantee system. Setting up an EU savings guarantee fund might be one option, as long as the banks provide the funding before any crisis occurs. Noyer gave the example of the French system that authorises the French authorities with power over the use of state funding to take decisions like sacking the managers and giving other institutions power over a failing bank. He said it would be appropriate for countries to levy a tax on banking to cover bailout costs.

In response to a question from Olle Schmidt (ALDE, Sweden) about whether the EU was running the risk of intervening too much, introducing too much legislation and going too far in its supervision of the banking system, Noyer agreed that it was necessary to strike the appropriate balance between essential measures and how they will impact on banks' ability to finance the real economy. He said that banks must not be allowed to wriggle out of new rules on the quality of capital, liquidity risk and “dynamic provisioning” but it was important not to kill off banks in attempts to “heal” them. Noyer, who used to be deputy ECB president, said the macroeconomic testing of recommended measures (tests that the Basel Committee will be carrying out later this year) will help calibrate the requirements to be levied on banks, but EU own funds rules for banks will not be applied until the Basel II rules, that are already in place in the EU, are applied by other parts of the world, like the United States. He made similar points about the well-needed reform of the EU financial supervision system, commenting that having inspection teams in a single location does not, in and of itself, ensure a better system (referring to the idea of ESA rapporteurs that the European Economic Risk Management Committee and the three ESAs (for banking, securities and insurance) should be located in the same city, namely Frankfurt in Germany). Noyer argued that the system recommended in the de Larosiere Report would be more effective in the Europe of today, namely keeping national supervisors and adding them to a federal system to encourage harmonisation of doctrine and legislation across Europe.