By Huw Jones
LONDON (Reuters) – French bank Credit Agricole has called on the European Union to address what it says is an unfair system of funding for the bloc’s banking sector safety net.
With the sector under the microscope after the forced takeover of Credit Suisse by UBS and the collapse of three U.S. banks last month, the European Commission is due to set out plans to bolster crisis management in the banking system on April 18.
Credit Agricole, however, says that French banks contributions to the Single Resolution Fund (SRF) remain a sticking point.
French banks account for 34% of the SRF, Credit Agricole said, describing this as “excessive” and “unfair”.
“No reform of the crisis management framework is acceptable if this issue is not resolved. No prospect of increased contributions to the SRF is acceptable,” the French bank said in a so-called position paper seen by Reuters.
Contributions to the SRF are linked to size of deposits and France is by far the biggest contributor, data from the Single Resolution Board, the fund’s administrator, shows.
The SRF was set up after the global financial crisis of 2007-09 as a backstop in case resources at banks are insufficient in a crisis. Funded by mandatory contributions from lenders in the EU’s banking union, it is due to reach about 75 billion euros ($81.89 billion) by 2024.
The European Commission has said its package of reforms will be “balanced” following extensive consultations. EU states and the European Parliament will have the final say on the draft reforms.
Credit Agricole had no immediate comment.
Separately, Germany and other EU states that have institutional protection schemes – a type of industry safety net – have warned that the bloc’s plans next week should not tamper with these schemes.
($1 = 0.9159 euros)
(Reporting by Huw Jones; Editing by David Goodman)
