By Jan Lopatka (Reuters 23.9.2013)
The Czech central bank will not make substantial changes to capital requirements for banks under new EU rules, central bank Vice-Governor Mojmir Hampl told the Reuters Eastern Europe Investment Summit on Monday.
The central bank has long been concerned about the impact of some European Union regulatory changes on supervision of its banking system, one of the steadiest in emerging Europe in the past decade, and Hampl said some changes could push Europe's banks towards becoming more like utilities.
Speaking on the international debate on banking regulation, he said he feared that a tough approach could raise costs and make banks less responsive to market forces.
"It seems to me that from time to time the view prevailing in the debate on the side of authorities is that we can get some free lunch- that we can get something for nothing.
"That we can get more financial stability, higher level capital adequacy in the banks without any cost, that the costs will be marginal or negligible- that is rather frustrating for me as a participant in many of these meetings."
Hampl has spoken in the past against new regulations, approved in response to the global banking crisis, saying they could eventually become the source of future problems.
The Czech banking sector has remained well capitalised and has not required any public aid. The average sector capital adequacy ratio was a healthy 17.1 percent in the second quarter.
"We cannot see any probable reason why average capital requirements on banks we supervise should alter substantially to where it is right now," Hampl said at the summit, held at the Reuters office in Prague.
"I don't want to say you should expect a fundamentally different supervisory approach to one bank compared to another. This is not our hallmark and I do not think this will be our hallmark in the future."
The biggest Czech banks are Ceska Sporitelna, a unit of Austria's Erste Group, Belgium's KBC unit CSOB, Komercni Banka which is majority-owned by France's Societe Generale, and a unit of Italy's UniCredit.
He declined to comment on monetary policy ahead of the Czech central bank's board meeting on Thursday.