ECONOMY

ECB stands against radical changes to regulations of commercial banks in EU

BRUSSELS (Reuters) – The European Central Bank rebuffed bankers’ appeals to speed up the merging of bank regulators across the European Union yesterday, saying radical change was unnecessary for now. Banks with operations in many EU states say it is costly to deal with various national market supervisors and that it would be cheaper to have a single, consolidated watchdog. Central bankers will not be rushed into action, however. «The European Central Bank supports an evolutionary rather than a revolutionary approach to further development of an EU framework to banking supervision,» ECB Vice President Lucas Papademos told a European Banking Federation conference. Michel Pebereau, chairman of BNP Paribas bank, said consolidated supervision is needed sooner rather than later and that the industry was moving much faster than its watchdogs. «The banking industry has to adapt to markets that are evolving each day. For us the speed of evolution is very rapid,» Pebereau said. Next month EU finance ministers discuss a report from Internal Market Commissioner Charlie McCreevy, which lists obstacles to cross-border banking mergers. The report is expected to say that supervisors can abuse their rights, on prudential grounds, to stop a merger, according to newspaper reports. McCreevy has said he wants a more restrictive use of this tool.