BNP Paribas SA Chief Executive Officer Baudouin Prot said governments should beware of adopting “excessive” regulations that hamper economic growth or weigh more heavily on certain regions.
Regulatory proposals could drag down European banks and may damage the regional economy as institutions shore up their own liquidity by holding back on providing loans, Prot, who’s also head of the French Banking Federation, said today in an interview broadcast on France’s LCI television station.
“The new rules won’t weigh down a bank because the bank will adapt, while they will instead be a drain on the economy,” Prot said. “It is absolutely vital for us in Europe to avoid rules that, in terms of competition, make us run with lead shoes against American or Chinese banks.”
Banks criticized proposals this month by the Committee on Banking Supervision in Basel, Switzerland, to increase regulations and a split by Group of 20 finance chiefs on an International Monetary Fund proposal to tax financial institutions for bailouts sent the matter back for further study.
The so-called Basel 3 proposals are “totally excessive” and could have “grave and negative consequences” for the region’s economy, Prot said. “If this package is adopted, I state clearly that the financing of the European economy will be gravely put in doubt.”
Prot defended France’s aid program for its banking industry, saying three-quarters of the money extended has been repaid, gaining the state 2 billion euros ($2.7 billion) in revenue. BPCE SA, the country’s second-largest bank by branches, has begun to repay its loan and should be finished within two years, Prot said.
“The state didn’t save the banks, the state supported the financing of the economy through the banks,” Prot said in the television interview. “The French plan was a success.”
To contact the reporter on this story: Heather Smith in Paris at email@example.com.