Deutsche Bank CEO Urges Regulators to Use Room for More Relief

Deutsche Bank AG Chief Executive Officer Christian Sewing urged regulators to provide more relief to Europe’s banks to keep loans flowing as the pandemic’s second wave engulfs the region.

While regulators were quick to respond to the crisis at the onset, they have “additional potential” to aid the flow of credit, Sewing said Monday at a conference. He suggested that some of the money banks are required to pay into a fund for winding down failed lenders should be used instead to grant credit, and called for lawmakers to reassess the consequences of a planned update of the Basel capital rules.

Banks have received unprecedented breaks by authorities this year to temporarily deal with losses and keep lending to virus-struck companies, in return for showing restraint on dividends and share buybacks. While some banks have started to push for permission to resume capital payouts to shareholders, others are lobbying to roll back yet more regulation put in place to make the industry safer.

Sewing said banks are paying more into Europe’s resolution fund than planned and called for it be capped at 55 billion euros ($65 billion) as lawmakers had originally intended. The industry contributed about 9.2 billion euros in such levies this year, an increase of 18% from 2019, he said at a conference in Frankfurt on Monday.

Each billion euros of equity that would be freed up this way could be used to make more than 20 billion euros of loans, Sewing said.

The Deutsche Bank CEO also said European lawmakers should “take the time” to weigh the consequences of implementing new capital standards from a group of international regulators gathered at the Basel Committee on Banking Supervision.

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