Karolin Schriever calls for an easing of regulatory burdens

At the Annual General Meetings of the World Bank Group and the International Monetary Fund, Karolin Schriever, member of the Executive Board of the German Savings Banks Association (DSGV) called for an easing of regulatory burdens and more scope for lending by credit institutions to help private households and business enterprises in the short term to cope with an economic lean spell and in the medium term to efficiently finance above all the energy transition. “It will not be possible to shape the “turning point in history” announced by policymakers by doing business as usual. What is needed is determination and more willingness to take risks. We need regulation and supervisory procedures which do not hamper but support both”, said Karolin Schriever. 

More specifically, Karolin Schriever submitted five proposals for a necessary easing of burdens, which might be used to facilitate access to loans for customers of banks and Savings Banks. According to Karolin Schriever, the introduction of the anti-cyclic capital conservation buffer and of the systemic risk buffer for real estate risks should be postponed until the first signs of economic recovery became visible, Basel IV in the EU should be adapted to European financial market and economic structures, the revision of all credit processes through MA Risk in the EBA Guidelines should be postponed, the bank levy should be suspended and potential credit moratoriums should be prepared. 

What is needed now is more scope to finance the energy transition and to reorganise supply chains. It would be counterproductive to tighten the risk screw exactly at the time when more willingness is needed to take risks. Credit institutions should now make every effort to look after their customers and not have to adjust internal procedures for regulatory reasons. Essentially, the aim is that regulatory requirements do not prohibit our institutions from doing exactly what policymakers have rightly asked us to do now and what customers urgently need: providing credit supply particularly during the crisis”, said Karolin Schriever. Credit institutions had demonstrated during the pandemic period that they were able to handle such an easing of burdens very responsibly.