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Economic and monetary challenges - Review of EU regulations to support the financing of the EU economy and financial stability

Review the impact of the legislation

By Hökmark Gunnar - MEP, Member of the Committee on Economic Affairs and of the Committee on Industry, European Parliament

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I think there is a risk of unintended consequences, reducing lending capacity mixing different targets. We should try to review the impact of the legislation since 2008.

The different pieces of banking regulations are depending on each other. When it comes to banking regulation it is important to make sure that it does not lead to unintended consequences such as over regulation and an even heavier administrative burden for banks. The purpose of banking regulation should be to increase the financial stability, not to make it more complex for banks to exist. With more complex banking regulation we will probably see Europe becoming less competitive.

I am responsible for the bank structural reform legislation that is being negotiated in European Parliament. The regulation targets the biggest banks that are so called globally systemic important meaning they could pose a risk to the financial stability. My intention with this regulation has since the beginning been to not hurt banks’ ability to exist and to play the important role they play.

I think there is a risk of unintended consequences

Access to finance is important to consider when you discuss banking regulation. SMEs in Europe are still very dependent on banks for financing. The initiative on Capital Markets Union from European Commission is important. A well-functioning capital market in EU would increase competitiveness and investments. But it is important that the proposals from Commission do not lead to even more regulation. That would hurt the already today well-functioning capital markets in EU. I hope the Commission and my colleagues in European Parliament share my view of how we should handle new regulation. We need to be really careful when we propose new legislation on banks and capital markets. There is a severe risk of unintended consequences. Addition of different pieces of regulation may lead to a more complex system. Therefore, I think we need to review all legislation on banks and the financial market before we decide on something new.