With legislation on prudential requirements for banks in force,aHerve Guider, general manager of the European Association of Cooperative Banks (EACB), warns against the risk that the technical standards should not water down this legislation. Guider also stresses that cooperative banks - generally small and medium-sized and focused on financing the real economy - face high costs to comply with the new banking rules. Taking into account the banking industry's diversity is for him a necessity.

The new prudential rules for banks - the CRD IV reform - are now being detailed at technical level. What are the main concerns of cooperative banks?

The adoption of CRD IV is a major step towards strengthening the banking system's stability and solidity. We provided input on several occasions on the draft text and we find that the version adopted is balanced. However, we are remaining very attentive to a number of points. First, the standards proposed by the European Banking Authority (EBA) must not water down the compromise text adopted by the Council and Parliament. For cooperative banks, for example, the subject of shares is a priority. Another of our major concerns is the definition of the liquidity coverage ratio or LCR(1) Over the last few months, we have requested the inclusion of central bank eligible assets in the list of highly liquid assets. This matter is crucial for financing the real economy. At the end of 2013, the EBA published two reports on the subject and it is now up to the Commission to legislate (via a delegated act) in the coming weeks. We are going to continue our efforts at every level to make our position heard.

I would also like to mention the more general problem of the cost of compliance related to the entry into force of new legislation and the growing demands of supervisory authorities.

Is the cost high?

Today, the qualitative and quantitative requirements of supervision and the obligation to comply with new rules mobilise nearly 80% of IT resources. On the other hand, less than 20% is devoted to investments to serve customers, develop new online services or improve our competitiveness. I would add that cooperative banks have the densest network, with more than 60,000 agencies across the EU. Five years ago, a medium-sized cooperative bank with a balance sheet of 5 billion invested on average 15 million in IT resources. Last year, the same bank had to invest 75 million to deal with the demands of regulators and supervisors.


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