Banks in the Focus of Economics and Politics. How Much More Can This System Take?
On 20 January 2014, a discussion entitled “Banken im Fokus von Wirtschaft und Politik. Welchen Belastungen kann dieses System noch standhalten?” (Banks in the Focus of Economics and Politics. How Much More Can This System Take?) took place at the law firm Binder Grösswang in the context of the talk series impulse.
The panellists Dr. Franz Gasselsberger, CEO of Oberbank AG; Dr. Michael Grahammer, CEO of Vorarlberger Landes und Hypothekenbank AG; Andreas Ittner, Vice Governor of the Österreichische Nationalbank; Dr. Walter Rothensteiner, CEO of Raiffeisen Zentralbank Österreich AG and Andreas Treichl, CEO of Erste Group Bank AG, discussed this topic in the conference area of the firm before some 200 guests. The discussion was moderated by Michael Nikbakhsh, head of the economics department of “Profil” magazine.
Franz Gasselsberger spoke out in favour of constructive cooperation between banks and the supervisory authority in implementing the new regulatory provisions. He also emphasised the stabilising role played by the regional banks during the crisis of the past few years and underlined the need for taking into account the size and risks of regional banks when laying down regulations and burdens.
Michael Grahammer expressed his understanding for the wish to regulate the banks after the financial crisis. “At the moment, however, more emphasis is being placed on quantity than on quality in the new regulations – and on the wholesale condemnation and burdening of all credit institutions. This will not contribute to a stabilisation of the banking sector on a medium or long term basis, but rather will further undermine its economic viability and hence its substance and stability. Moreover, it will inevitably involve a further increase in the cost of banking services,” he said.
Andreas Ittner stated in no uncertain terms: “The importance of higher risk buffers in the banking sector is the lesson we have learned from the crisis – and not merely a ‘fad’! They are intended to make the banking sector more stable and ensure the sustainable availability of funding for the business sector.”
Walter Rothensteiner gave the opinion that the flood of regulatory provisions for banks had become almost too much to cope with: “We are currently sending about 5000 pages of statistics to 15 different regulatory authorities every month. It is almost impossible to avoid missing something somewhere. The present legal situation makes it possible to impose penalties for things that no one understands.” Rothensteiner continued: “In Austria there is a general lack of understanding for the finance industry. There is a danger that the assumption of risk will be criminalised.”
As Andreas Treichl sees it, the banks are in a better position than ever before, thanks to Basel III. He believes, however, that the timing is a problem, because there have been no fundamental improvements for the business sector. Entrepreneurs need incentives if they are to invest. But the banks have become more expensive and are unable to provide any positive incentives at the moment. “We have to accept the fact that the times have changed for banks and that there is a good reason why it is more difficult for banks to obtain capital than before,” Treichl said. “However, in the old days banking was a highly respected profession and it was not possible in any industry to be only mediocre. The banks have finally been called upon to do something about this. If a bank is inefficient, the problem has to be professionally solved.”