financial experts have called for relief for smaller financial institutions in terms of banking regulation. According to an analysis by researchers on behalf of the Federal Ministry of Finance, after the financial crisis, tougher rules for banks have achieved a total of your goal. However, the implementation is causing particularly high costs for smaller financial institutions, the study of the Frankfurt research center Safe. You of all people would contribute to a stable financial system. Therefore, there are good reasons for “targeted regulatory relief” for very small money houses. The Bundesbank had argued in the past repeatedly called for a reduction in the regulatory burden for smaller institutions.
The researchers examined the impact of the new regulations, which were introduced after the financial crisis ten years ago, until the beginning of 2018 in the German financial sector. With them, the banking industry should be overall more stable. Banks today need to have significantly thicker equity cushion for possible economic risks. The Review of the financial regulation had been agreed in the coalition agreement of the CDU and the SPD.
The study estimates the annual cost of regulation for the banking sector, two to three billion euros. This corresponds to a share of ten per cent of the combined profits. The sector is one of the sectors with the highest average expenses as a result of the regulatory requirements.
According to an analysis of the balance sheet data of 858 German banks for the years 2010 to 2016, the researchers come to the conclusion that Germany’s banks are today in a better position to cope with possible risks. According to the study, had decreased “the probability of losses exceeding the equity of the banks, and likewise, the amount of any equity in addition to losses”. “Regulation after the financial crisis has its justification, the measures take effect, and it shows in the result of an improvement in the stability in the financial sector,” said the Safe-Deposit box-financial expert, Rainer Haselmann, the German press Agency.
In some areas, there are, according to the study, however, the need for reform. For example, a uniform Europe-wide regulation of the risks of government bonds, or when dealing with so-called non-performing loans, i.e. loans in which the debtor has difficulties with the repayment. Also, don’t be regulated “is still ambiguous enough that banks in difficulties will not be saved with taxpayers’ money,” said Haselmann.
