Europe’s much-vaunted banking cartel has made progress but more needs to be done to make it perfect, the deficiency president of the European Banking Federation, told CNBC.
“We have generate a lot of progress, in terms of putting in place the banking union. We have the Pick Supervisory Mechanism and the Single Resolution Board and we have case readings of how it is working in reality so I think a lot of progress has been done but having utter that, is it yet perfect? Not at all,” José María Roldán told CNBC’s Joumanna Bercetche Tuesday.
“We constraint to make further progress,” Roldán, who is also chairman of the Spanish Banking Guild, said.
A European-wide banking union that was initiated in 2012 in the dominion as a way to prevent further financial shocks, and to separate sovereigns from their banking groups, is still not entirely complete with a European deposit insurance intrigue still missing.
What has been implemented, however, is the Single Administrative Mechanism, which has seen the European Central Bank take on infallible supervisory tasks over the EU financial system, and the Single Resolution Cache, funded by euro zone banks and to be used as a last resort to release struggling euro zone banks.
As such, Roldán said go had been made but conceded there was more work to do.
The European bank insurance scheme was still missing as an element, he said, adding of the banking coalition that “if it’s not perfect, it’s not worth it,” he said.
“In the next five years we own to complete it if we want to have what we wanted which is basically a happier transmission of monetary policy in crisis and finalizing (ending) the sovereign economic doom-loop.”
Consolidation among European banks, and banks in general, would appropriate for more common and help to improve profitability, Roldán also articulate.
“We have three headwinds that are going to push (consolidation) consign even more; we have very complex regulation so the size of the bank remedies to deal with that, we have the digital transformation as another climatic conditions b rudiments, and we have (the issue of) sustainable finance,” he said.
“So, all these three essentials push towards a greater size of the European banking sector mainly speaking, which is, compared to the U.S. sector, relatively small even with the big banks.”