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Financial Times, 7 september 2011
Passera: Banking system safer now
QUESTION: Welcome to the FTs Future of Banking Series. I have
with me now Corrado Passera, chief
executive of Intesa Sanpaolo, Italys largest retail bank and one
of Europes largest banks. Mr. Passera, thank
you very much indeed for being with us today. We are broadly
looking at, at the moment, during this series,
given the changes weve seen in the banking system over the last
four years since 2007, how in your view, is
the banking system different than it was in September four years
ago?
PASSERA: If the question is, is the banking system safer, the
answer is yes. Weve done a lot of work,
regulators have done a lot of work, stronger capital, stricter
liquidity rules. So thats already a lot. Probably,
if we compare 2007, 2008 and today, we dont have in front of us
the kind of recession that the world had a
few years ago. So, because of all these reasons, we can say that
the banking system as a whole is safer.
Then, you know, the banking system is a zoo with many different
animals, so everyone has his own
characteristics.
QUESTION: But is it too safe? Would that be
PASSERA: No, I wouldnt say so. I think we made a number of good
steps in the right direction. Capital in
itself is not enough to prevent banks from having troubles, but
a good level, the right level of leverage and
capital is certainly a move in the right direction. Liquidity
rules that will have to be applied in a number of
years maybe are even a bit stricter, but the direction is
certainly the right one. Too many rules? Maybe
were running that risk. But what we have done so far is
reasonable. There is still the big area of derivatives
that would need some more attention and some more regulations.
But as of today, I would say we have
done a good job altogether.
QUESTION: Do you feel, given you have these big regulations
changes taking place in the US, in Europe, in
the UK, how is this affecting the competitiveness of these
regions, compared with other regions, Asia in
particular?
PASSERA: The safeness of the banking system is a strong element
of competitiveness in itself. So, thats the
first point. Second, we have not yet levelled the playing field
well enough within Europe, within the Western
World and at the global level. So we certainly suffer from a
number of distortions that will have to be
addressed and fixed, but first lets make this system safe and
that is something that certainly we have done.
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QUESTION: And the outlook for profitability then, turning to
that, what is your view for the banking system,
for the European banking systems for starters, for the next few
years?
PASSERA: Each segment of the system, in my opinion, is finding
new equilibrium and Im not at all negative
for the future outlook of profitability in any of the segments
of the banking system, certainly in ours.
QUESTION: So, speaking about Intesa, you consider yourselves a
real economy bank. Would that be
correct?
PASSERA: We are a real economy bank.
QUESTION: Absolutely. And thinking then with regard to the
impact of, say, profitability, but also the
regulatory system that weve been discussing, what will the
trickle down effect be on consumers in the real
economy from these changes were seeing, if any at all?
PASSERA: No, no. The stronger capital requirements and the
stricter liquidity requirements - and we are
amongst the very few banks that are already compliant today with
2018-19 targets make capital liquidity
even more precious resources, so the management of the bank has
to be more focused and more
sophisticated, more capable to give value to these scarce
resources. And were doing it. As of today, we
havent seen, at least in the countries where we operate, any
credit crunch because of these new rules.
Obviously these rules do not have to be pushed too far, because
if you go too far in terms of capital
requirements, then the cost of credit becomes very inefficient
for the economy. But, as of today, and we
accepted the new normal, the 10 per cent /---/ and then common
equity level is not inconsistent with credit
development and growth in our economy.
