With nearly 140,000 employees and an annual order intake in excess of €166 billion euros, European aircraft manufacturer Airbus Group is one corporate example that shows how European banks contribute to prosperity. Harald Wilhelm, Chief Financial Officer of Airbus Group & Airbus, talks about the role of banks in this European corporate success story.
Airbus sells its aircraft across the globe in conditions that can only be described as fiercely competitive. It needs a certain type of bank relation and support, which will most easily and naturally come from a large bank, preferably a European one. The services and products that Airbus is looking for from its banking partner(s) will be much more difficult to obtain or costly if a number of lingering financial reforms are implemented without consideration of the robustness of the present day regulatory structures that confine risk taking in banking in Europe. Among these, the banking structural reforms under discussion, the fundamental review of the trading book that is expected to increase further the capital cost of trading activities and the announced review of the risk weightings and internal modelling for banking more generally. All of which still stand to significantly change what European banks will be able to do and at what price to customers.
Bank Structural Reform
The European Banking Federation maintains its concerns with regards to the potential impact and unintended consequences that the EU’s Bank Structural Reform (BSR) initiative will have for liquidity, capital markets and economic growth and jobs.
The EBF urges European Union institutions to substantially amend the BSR proposal so that the European banking sector can remain competitive in a global context, and to take into account the need to apply the subsidiarity principle where appropriate.
As stated repeatedly, policy makers need to reconsider their priorities as Bank Structural Reform could lead to a loss in European investment capacity equal to 5 percent, representing a decline of almost €100 billion in capital expenditure on the long term. Any further reform of the banking sector also needs to take into view the new, significantly different regulatory and economic environment.
Related EBF publications:
– Unintended consequences of structural reform in EU banking, March 2015
– Press release: EBF maintains concerns on Bank Structural Reform, June 2015
– The European Commission’s proposal for a regulation on structural measures
improving the resilience of EU credit institutions: A critical assessment of the
EBF Banking Structural Reform Expert Group, November 2014
– EBF cartoons: