GVB draws mixed conclusions on proposals for Basel III finalization / praise for …

Cooperative Association of Bavaria eV

Wednesday October 27, 2021 – 3:30 p.m.

Munich (ots) –

The Bavarian Cooperative Association (GVB) reacted with cautious approval to the proposals published by the EU Commission on Wednesday for the final implementation of the Basel III requirements. “The EU Commission has shown wise insight with its schedule. It gives the banks the necessary flexibility by postponing the entry into force of the new regulations by two years to the year 2025,” said GVB President Jürgen Gros on Wednesday in Munich.

Gros also praised the retention of the SME factor. This allows banks to set aside less equity for loans to small and medium-sized businesses. “The SME factor has proven itself. Loans to small and medium-sized companies are associated with low risks. The EU Commission is thus taking account of the medium-sized economic structure such as here in Bavaria,” explained Gros.

Gros, however, is critical of the regulation contained in the Basel III proposals, according to which medium-sized companies must also submit themselves to an external rating. Otherwise, banks have to classify these loans as riskier across the board and back them with more equity. Due to the high costs, many medium-sized companies, such as craft businesses, do not have an external rating. “This means that loans for medium-sized companies are becoming more expensive,” warned Gros. “That is a completely wrong signal and runs counter to German and Bavarian interests. Small and medium-sized enterprises need favorable financing conditions in order to be able to invest and grow. The rating clause undermines this goal.”

The GVB President is also not convinced that sustainability criteria have been forced into supervisory law. “Banking supervision has to focus solely on the risk,” warned Gros. “It jeopardizes financial stability when risk assessments are mixed with political sustainability considerations.”

The Genossenschaftsverband Bayern eV (GVB) has represented the interests of Bavarian cooperatives for more than 125 years. Its 1,181 members include 222 Volksbanks and Raiffeisenbanks as well as 959 companies from sectors such as agriculture, energy, trade, crafts and services. With around 50,000 employees and 2.9 million shareholders, they form one of the largest medium-sized business organizations in the Free State (as of December 31, 2020).

Press contact:

Dr. Gerald Schneider Press Officer

Telephone: +49 89/2868 – 3402 Fax: +49 89/2868 – 3405

E-mail: [email protected]

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Those: Presseportal.de


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