The Savings Banks Industry in Europe and worldwide

The role of ESBG/WSBI

The European Savings Banks Group The European Savings Banks Group (ESBG)(ESBG)

19631963: Establishment of the European Savings : Establishment of the European Savings Banks Group, based in BrusselsBanks Group, based in Brussels

ESBGESBG::European banking association representing European banking association representing the interests of savings and socially the interests of savings and socially committed retail bankscommitted retail banks

Forum for cooperation and exchange of Forum for cooperation and exchange of experiencesexperiences

Platform for joint initiatives, facilitating Platform for joint initiatives, facilitating cross-border projects in the banking sectorcross-border projects in the banking sector

ESBG in figuresESBG in figures

29 Members (banks 29 Members (banks andand associations) from 26 associations) from 26 European countries European countries (incl. 20 EU countries)(incl. 20 EU countries)

Banks represented:Banks represented: 864 864 Branches: Branches: 60,89960,899 Total assets: Total assets: 6,061 billion6,061 billion Non-bank deposits:Non-bank deposits: €2,935€2,935 billionbillion Non-bank loans: Non-bank loans: €1,685 billion€1,685 billion Staff:Staff: 950,000950,000

= 1/3 of Europe’s Retail Banking = 1/3 of Europe’s Retail Banking MarketMarket

The European Savings Banks Group The European Savings Banks Group (ESBG)(ESBG)

Added-value of the ESBG:Added-value of the ESBG: => Forum for cooperation=> Forum for cooperation

Business CooperationBusiness CooperationPromotion and facilitation of cooperation and Promotion and facilitation of cooperation and

exchange between members on a exchange between members on a bilateral/multilateral basis to:bilateral/multilateral basis to: achieve a more global outreach achieve a more global outreach accompany their customers abroadaccompany their customers abroad

Current Projects:Current Projects:The International Business NetworkThe International Business NetworkCapital Markets Committee

The World Savings Banks Institute The World Savings Banks Institute (WSBI)(WSBI)

19241924:: Creation of the International Savings Banks Creation of the International Savings Banks Institute in Milan, subsequently based in GenevaInstitute in Milan, subsequently based in Geneva

ObjectivesObjectives: : 1. International advocacy: promotion of proximity 1. International advocacy: promotion of proximity banking through the savings banks model banking through the savings banks model 2. Vehicle for cooperation between members;2. Vehicle for cooperation between members;3. Training and consultancy3. Training and consultancy

Institution building; Organisation and Institution building; Organisation and operations operations development; Management and staff development; Management and staff training; training; Research and policy formation projects; Research and policy formation projects; Track Track record in 70 countries since 1992record in 70 countries since 1992

WSBI in FiguresWSBI in Figures

110 members from 90 countries110 members from 90 countries

Only international retail Only international retail banking banking organisation organisation

worldwideworldwide!!

Americas:Americas:16 Members16 Members13 countries13 countries

Europe:Europe:36 Members36 Members30 countries30 countries

Asia-Pacific:Asia-Pacific:22 Members22 Members16 countries16 countries

Africa:Africa:37 Members37 Members31 countries31 countries

Institutions represented:Institutions represented: 6000 (January 2009)6000 (January 2009) Branches: Branches: 162,000 162,000 Total Assets: Total Assets: €9€9,000 billion ,000 billion Non-Bank Deposits:Non-Bank Deposits: €4€4,637 billion ,637 billion Non-Bank Loans: Non-Bank Loans: €4€4,363 billion ,363 billion Staff:Staff: 1,000,0001,000,000

A changing environmentA changing environment

Our Members: Our Members: from pure savings banks to socially from pure savings banks to socially committed retail banks embodying stakeholder modelcommitted retail banks embodying stakeholder model

From “European Savings Banks Group” From “European Savings Banks Group” to to ““ESBG- the voice of savings and retail bankingESBG- the voice of savings and retail banking” ” representing efficiently operated, competitive financialrepresenting efficiently operated, competitive financialinstitutions, following common characteristics:institutions, following common characteristics:

RRetailetail: : active in providing retail financial services for active in providing retail financial services for individual consumers, households, SMEs, local authoritiesindividual consumers, households, SMEs, local authorities

RRegionalegional:: broad decentralised distribution network, broad decentralised distribution network, providing local and regional outreach = proximity bankersproviding local and regional outreach = proximity bankers

RResponsibleesponsible: : socially responsible approachsocially responsible approach to business to business and bringing a return to societyand bringing a return to society

Our first objective : Our first objective : Interest Representation Interest Representation

Importance of Importance of Lobbying at European levelLobbying at European level- 80% of legislation related to the banking sector 80% of legislation related to the banking sector

comes from the EUcomes from the EU

- 3 horizontal banking associations in Brussels3 horizontal banking associations in Brussels

- ESBG ESBG only one only one raising profile of raising profile of ALLALL its its members, sincemembers, since Well-definedWell-defined entities represented: 3R’s entities represented: 3R’s Coherent and egalitarian approach Coherent and egalitarian approach towards memberstowards members Thus, opinion Thus, opinion of all members of all members taken into account (not taken into account (not

only the one of bigger institutions)only the one of bigger institutions)

Lobbying of EU institutions on Lobbying of EU institutions on ALLALL financial financial services related regulatory and policy initiatives services related regulatory and policy initiatives (1):(1):

Review of the rules on capital requirements Review of the rules on capital requirements (Basel III, CRD IV)(Basel III, CRD IV)

Deposit Guarantee SchemesDeposit Guarantee Schemes Capital markets related issues, including MiFIDCapital markets related issues, including MiFID Consumer and SME Policy issuesConsumer and SME Policy issues Fight against money laundering (AML)Fight against money laundering (AML) Payments, SEPAPayments, SEPA

ESBG’s long-term lobbying activities ESBG’s long-term lobbying activities (1/3)(1/3)

Lobbying of EU institutions on Lobbying of EU institutions on ALLALL financial financial services related regulatory and policy initiatives services related regulatory and policy initiatives (2):(2):

Delivering long term perspective (for instance Delivering long term perspective (for instance for internal studies) combined with concrete for internal studies) combined with concrete responses to consultations (joint position responses to consultations (joint position papers)papers)

Monitoring and real time information on key Monitoring and real time information on key developmentsdevelopments

Use ESBG as a platform for exchanges of Use ESBG as a platform for exchanges of views and experiences between Membersviews and experiences between Members

ESBG’s long-term lobbying activities ESBG’s long-term lobbying activities (2/3)(2/3)

OUR OBJECTIVES:OUR OBJECTIVES:

- Promote Pluralism Promote Pluralism of the European banking of the European banking industryindustry

- Advocate for the recognition of Advocate for the recognition of sustainable and sustainable and responsible bankingresponsible banking

- Principle of subsidiarityPrinciple of subsidiarity: Create a: Create an EU framework n EU framework for retail financial services for retail financial services respectful of respectful of national specificities national specificities and market practicesand market practices

- ProportionalityProportionality

- Level playing fieldLevel playing field:Level regulatory playing:Level regulatory playingfield: « field: « same business, same risks, same rulessame business, same risks, same rules » »

ESBG’s long-term lobbying activities ESBG’s long-term lobbying activities (3/3)(3/3)

ESBG’s current lobbying files ESBG’s current lobbying files (1/6)(1/6)

Basel III:Our members’ concerns:

Stronger capital framework: stricter definition of capital; tackling pro-cyclicality; introduction of leverage ratio; address

counterparty credit risk

Our response:Urging global regulators to take specificities of non-joint stock

companies and retail banking structures into account when transposing the Basel III framework into EU legislation;

Pointing at cumulative effects of the regulation on smaller, decentralised financial institutions, which support the real economy

Constant lobbying in front of Basel Committee, Commission and European Parliament, which is our closest ally in this respect

Deposit Guarantee Schemes (1)

ESBG advocates for:

- Decreasing the target level of the fund (the total target level should be 1% instead of 2%)

- Target level: reference should be made to covered deposits, i.e. the eligible deposits not exceeding the coverage level (instead of eligible deposits, i.e. deposits that are not excluded from protection)

- In a first step limiting the payout on the nominal value, pay out interests in a second step

ESBG’s current lobbying files ESBG’s current lobbying files (2/6)(2/6)

Deposit Guarantee Schemes (2)

ESBG advocates for:

- Eliminating the possibility of cross-border borrowing mechanism between the schemes

- Introducing longer transition periods (the different deadline, the shortest being December 2012, should all be prolonged to ensure smooth transition and avoid an excessive burden)

ESBG’s current lobbying files ESBG’s current lobbying files (3/6)(3/6)

Deposit Guarantee Schemes (3)

ESBG is opposed to:

- Questioning of mutual and voluntary schemes (these schemes function well and provide safety and reliability in addition to the classical function of payout of Deposit Guarantee Schemes)

- Discontinuing the possibility of set-off (instead this practice should be continued as a national discretion)

- Shortening the payout delay to 7 days (instead it should be kept at 21 working days, which is already ambitious)

ESBG’s current lobbying files ESBG’s current lobbying files (4/6)(4/6)

Debate on harmonisation of rules on responsible mortgage lending and borrowing at EU level

Commission’s aim: Limit focus to EU mortgage credit, in particular the pre-contractual stage of mortgage credit (including obligation to assess creditworthiness and suitability) and regulation of credit-intermediaries

ESBG is opposed to EU mortgage credit regulation due to local nature of market and demand = continues to pursue lobbying activities in European Commission and Parliament

ESBG’s current lobbying files ESBG’s current lobbying files (5/6)(5/6)

Other ESBG current key topics:Bank fees

Commission preference for standardised sheet for presentation of bank fees ESBG approach: potential self-regulation with EBIC and considering the implications of different regulatory avenues

International and EU level discussions on bank levies and taxes (set-up of Task Force)

Main concern: risk of over-regulation

ESBG’s current lobbying files ESBG’s current lobbying files (6/6)(6/6)

WSBI’s lobbying activitiesWSBI’s lobbying activities

Challenges at international level focuses on:

ACCESS to FINANCE&

Fight for FINANCIAL INCLUSION

In this context, promotion and constant support of members’ financial inclusion activities all around the world; Recognition by Bill and Melinda Gates Foundation, which granting multi-million USD project for WSBI members in 10 countries to double the number of savings accounts for the poor

CONSTANCE “STANDHAFTIGKEIT” in:

Values: responsible banking, relationship oriented vs. transaction oriented banking

Banking Model: regional, responsible, retail benefiting the real economy

• Message: Importance of Proportionality; Risk of cumulative effects of regulatory

proposals on our members, especially on their lending capacity and their constant support to the real economy

= The crisis is an opportunity, due to the overall recognition of the advantages of our members’

banking model

ESBG/WSBI ESBG/WSBI OUR response to the challengesOUR response to the challenges