33433
ECB Regulation Criticized
World Economy

ECB Regulation Criticized

The head of Russia’s biggest bank has criticized the European Central Bank for forcing its eurozone subsidiary to be supervised by officials in Frankfurt and making it raise more capital.
Herman Gref, chief executive of Sberbank, told the Financial Times in a recent interview that “European banking will have a very, very difficult period of time now” because “the regulatory policy is quite difficult”.
“I can’t understand what they are doing, frankly,” said Gref, a former Russian economics minister who has run Sberbank since 2007. The ECB declined to comment.
Sberbank’s Austrian subsidiary was subjected to a stress test by the ECB in 2015 after being added to the list of banks considered systemically significant along with that of Russia’s VTB and a number of other lenders.
Sberbank and VTB had to inject an extra €240m and €200m into their Austrian units, respectively, after they both failed the ECB stress tests by falling below the minimum capital required under the adverse scenario.
“If you have the push from the market, a squeeze from the regulator and bad macroeconomic conditions, you know, it does affect your health quite badly,” said Gref, arguing that Europe’s tough regulatory stance was handing US banks a big advantage.
“The banking system is in its most dramatic period of its history,” he said. “If you look into the future of the European banks, we think it will be quite a difficult one. American banks have quite a different macroeconomic situation and their regulation is different.”
Sberbank, which is listed in Moscow and London but still majority owned by the Russian government, bought Volksbanken International, a network of branches in eastern Europe including Hungary and Croatia, as part of an acquisition spree in 2012.
It is now slimming down in the region and recently sold its Slovakian operations. Russia’s biggest lender with assets of $355b has faced “three black swans” this year, according to Gref, a noted proponent of liberal market reforms who was a minister during Vladimir Putin’s first two terms as Russian president.
He said Russia’s three main problems were the drop in the oil price, western sanctions and the slow pace of structural reform.

 

Short URL : https://goo.gl/fhE3Ls
  1. https://goo.gl/z90S6a
  • https://goo.gl/8PG0r6
  • https://goo.gl/EspqUL
  • https://goo.gl/B2XKFN
  • https://goo.gl/HlfR11

You can also read ...

Nigeria Recovery Fragile
Nigeria’s economy grew 1.4% year-on-year in the third quarter...
Asian Shares Dip
Asian shares fell in muted trading Monday ahead of the...
Michel Barnier during his speech in Brussels, Nov 20, said: Britain would lose its “passporting” rights to let banks automatically do business in the EU after it leaves in March 2019.
European Union Brexit chief Michel Barnier said on Monday the...
The export climate index remains elevated.
Japan’s exports grew 14% over a year earlier in October on...
IMF expects demand growth for housing to remain robust.
The International Monetary Fund says any pickup in Australian...
Household debt topped the list of key systemic risks cited by market watchers at 87%.
South Korea’s growing household debt and geopolitical risks...
Jordan’s real GDP is forecast to grow at 3% in 2018 and 3.2% in 2019.
Jordan’s economy which has been straddled with mounting debt...
Mongolia Rated Positive
Fitch Ratings agency has revised Mongolia’s credit rating from...

Trending

Googleplus