52
economy will recover again and the demand
for loans will increase significantly, it will not
become easier for financial institutions to con-
tinue to fulfil their role as funder of the econ-
omy within the Basel III framework. After all,
if the financial institutions must phase out too
much, this will also directly affect their added
value and the extent to which they can satisfy
the demand for loans.
Consumer protection: MiFID
Basel III, for that matter, is not the only legis-
lation that intervenes in the social role of the
financial institutions. Four years after the Mi-
FID Investment Directive was issued, the Eu-
ropean Commission tightened these rules in
the MiFID II in October 2010. The suitability
test that indicates whether or not an invest-
ment product corresponds with a customer’s
investment profile must, for example, be ex-
ecuted each year from now on, even if the cus-
tomer’s investment profile has not changed in
the meantime.
Supervision
Banking supervision has recently been go-
ing through a number of profound changes.
According to the Twin Peaks regulation, in
which the Belgian supervisory structure has
been laid down, the supervisory authority
(
NBB) for example has the power to block
strategically important decisions taken by sys-
temic banks, if one fears that they may jeopar-
dize financial stability.
Furthermore, on a European level yet more
new initiatives are still in the pipeline. One of
them provides for the creation of a European
banking union. This union would be under
the supervision of the European Central Bank.
In this way, European banking supervision
will reach a higher level of uniformity.
The banking union would have one deposit
guarantee system and dismantle financial in-
stitutions in trouble in a similar manner, for
example with the help of a previously drawn
up living will for banks.
The proposals in respect of crisis management
aim to give the authorities the power to inter-
vene at an early stage when a bank or group
of banks gets into trouble. They also must en-
sure that, if the bank can no longer be saved,
the restructuring and liquidation costs can
be shifted to the bank’s owners and creditors
(
shareholders, bondholders, etc.) instead of to
taxpayers.
The European DGS system must ensure that
the savings of the Belgian citizens remain
guaranteed if a bank gets into trouble. Be-
fore the crisis, savings were guaranteed up
to €20,000. As a result of the events in 2007-
2008,
the amount has been raised to €100,000.
To guarantee this, the financial institutions
must of course pay higher DGS contributions.
Within the creation of a European bank
union, a system is currently being developed
that must put all national DGS regulations on
an equal footing. We must be careful therefore
with national regulations that may go against
international legislation. The financial world
is by definition a very international world,
which is preferably regulated internationally
in a coherent manner. That argument applies
in the Belgian financial landscape even more
than elsewhere. The Belgian landscape, after
3.
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GOOD GOVERNANCE