The European Central Bank plans to charge lenders as much as €15 million a year in supervisory fees. The largest institutions will be hit with annual levies of this size, according to draft proposals from the central bank. Most of the approximately 130 lenders under its direct supervision will pay between €700,000 and €2 million. About 5,800 banks overseen indirectly will pay between €2,000 and €200,000, excluding national charges.
The Frankfurt-based ECB takes over as the region’s bank supervisor in November as the first pillar in a banking union that aims to put the financial system on a sounder footing. The central bank estimates that the Single Supervisory Mechanism will spend about €260 million in 2015. “If confidence comes back, in the end, everybody will benefit,” Steven Keuning, director general of human resources, budget and organization at the ECB, told reporters on Tuesday.
“Their funding becomes cheaper. It can even happen that the benefits surpass the costs.”
The ECB will start charging the fees from November and until then will cover any costs itself. The charges identified in the draft regulation are an estimate and there will be no cap on the amount paid by individual banks. Fees will be based on the lender’s risk exposure and total assets, with each accounting for 50 per cent of the calculation, according to the regulation. Supervised banks with several branches and subsidiaries in one or more euro-area country will be issued only one fee notice. The draft document is open for public consultation from today until July 11th.
The ECB will hold a public hearing in Frankfurt on June 24. “It’s never pleasant to be presented with a bill, but in this case you get something in return,” Jan Sijbrand, the Dutch representative on the ECB’s Supervisory Board, said in Amsterdam on Monday. “When trust returns to the European banking sector, banks will immediately benefit from it. Then the spreads will come down, funding will get cheaper and the economy will stabilize. All banks know that.” [Bloomberg]