Former Prime Minister Dr Alfred Sant has called on the new President of the European Central Bank to address the plight of small and medium sized banks operating in small countries that were being burdened with the full weight of centrally established regulation on a one size fits all basis.
Speaking on Tuesday during the European Parliament plenary debate in Strasbourg on the appointment of the President of the European Central Bank, Dr Sant expressed his support for the appointment of Ms Christine Lagarde although he sounded his disapproval for her political orientation and part of her political record.
In his speech, Dr Sant also expressed his agreement that fiscal policy was needed to bolster growth at euro zone level as otherwise the new President of the European Central Bank would face an impossible task in future.
“Monetary policy by itself cannot respond to the challenge of sustaining growth, creating worthwhile jobs, enhancing competitivity and safeguarding pensions within the euro zone”, Dr Sant stated.
Dr Alfred Sant used his intervention in the debate to highlight the situation of small and medium sized banks, an issue that the European Central Bank tended to put aside in its decision making. He said that medium to smaller banks in the euro zone, some of which were operating in the smaller states were considered as “systemic” banks or close to that.
According to Dr Sant, their areas of activity related to niche national markets in which larger banks had scant interest but they serviced many SMEs in their home markets which would otherwise struggle to find working capital.
In the view of Dr Sant, these banks were being burdened with the full weight of centrally established regulation on a one size fits all basis, under banking union procedures and were being rendered less and less profitable.
In the plenary vote, Ms Christine Lagarde obtained the approval of the European Parliament to be the next President. In a secret vote, MEPS voted 394 in favour, 206 against and 49 abstentions.