Alfred Sant told the European Parliament that we need to ensure that smaller banks within the smaller economies operating in the Eurozone do not become more risk averse by inhibiting their exposure to financial services in their national economy, and more importantly when lending to small and medium sized industries, while becoming less competitive. ‘Not all banks will be equal’, emphasised Alfred Sant. ‘Least able to counter such considerations will be the banking systems of medium to small member states, especially in economies where financial services have become a significant sector.’
Alfred Sant said that a banking union should serve to create transparency of operations across banks in the union while shielding national governments from the burden of bailouts should their big banks collapse. ‘Theoretically, all banks would need to be treated equally, subject to the particular conditions of their national economic environment. However, the Resolution Authority will inevitably be coloured by political considerations of a multilateral nature, as is happening now in the European Central Bank. Quite likely, the political dynamics of the Resolution Authority will hardly be different from those of the eurogroup when say the latter was dealing with Southern European countries.’ Said Sant.
The Maltese Europarliamentarian voted in favour of the appointment of the members of the Single Resolution Board (SRB), an independent body which is to manage the resolution of failing banks in the Eurozone. The EP approved the nominees with 522 votes in favour, 105 against and 67 abstentions. The candidates had already been approved by the Economic and Monetary Affairs Committee during which Alfred Sant had grilled Ms Elke König, the sole candidate to become head of the Single Resolution Board (SRB).