Sept. 5 (Bloomberg) -- Societe Generale SA Chief Executive Officer Frederic Oudea said France’s lenders support plans for a European banking union as it would help rebuild confidence in the industry.
“This is not only a question of safety but to ensure that we have a level playing field and a maximum harmonization,” Oudea said in a speech today at a banking conference organized by Handelsblatt newspaper in Frankfurt.
Deutsche Bank AG co-Chief Executive Officer Juergen Fitschen said at the same conference yesterday that he also supports plans for a European banking union that cover all lenders, clashing with representatives of smaller lenders such as Georg Fahrenschon, president of the German DSGV savings banks association. He said smaller German banks shouldn’t be forced to contribute funds to a European deposit insurance program as they have comparable mechanisms in place already.
European finance ministers are fleshing out a plan to help integrate the banking sector of the 17-member currency area by placing supervision of the bloc’s banks in the hands of the European Central Bank and setting up a common deposit-guarantee plan and a bank resolution fund.
Common banking supervision would be a first step in the creation of a banking union, European Commission President Jose Barroso wrote in a guest commentary in Handelsblatt. The next step would be to work on a deposit insurance program and a mechanism for the winding down of banks, he wrote.
Regulation and the high indebtedness of European sovereign states will continue to dominate the industry’s agenda for several years, Commerzbank AG Chief Executive Officer Martin Blessing said in a speech at the conference today. Echoing comments by Deutsche Bank’s Fitschen and German BdB banking group head Michael Kemmer, Blessing said he supports plans for a “unified banking supervision in Europe.”
“The supervision needs clearly defined rights of interference,” he said. Local supervision should be carried out by local authorities, Blessing said.
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