Alfred Sant calls on new ECB president to reform regulations for small banks

The Labour MEP was speaking during the confirmation vote in the European Parliament of the new ECB President Christine Lagarde

Labour MEP Alfred Sant
Labour MEP Alfred Sant

Labour MEP Alfred Sant has called on the new president of the European Central bank to address the situation of small and medium sized banks being burdened by one-size-fits-all regulation.

Speaking during the European Parliament's plenary debate on the appointment of Christine Lagarade as new ECB president, Sant communicated his support for her nomination, but expressed disapproval over her political orientation and part of her political record.

Sant said fiscal policy was needed to boost growth at Eurzone level, as otherwise Lagarade would face an impossible task in the future.

“Monetary policy by itself cannot respond to the challenge of sustaining growth, creating worthwhile jobs, enhancing competitiveness and safeguarding pensions within the eurozone," Sant said.

The former prime minister also used his intervention to highlight the problems faced by small and medium sized banks, which he said had been put aside during ECB decision making.

The MEP said that medium to smaller banks, some of which operated in the smaller states of Europe, were being considered as systemic, with all the additional regulation placed on them.

“Their areas of activity relate to niche national markets in which larger banks had scant interest, but they service many SMEs in their home markets which would otherwise struggle to find working capital,” Sant said.

According to Sant, these banks are being burdened with the full weight of central regulation, whose one-size-fits-all basis, is making their work less and less profitable.

In the plenary vote, Lagarde obtained the approval of the European Parliament to be the next ECB president. In a secret vote, MEPs voted 394 in favour, 206 against and 49 abstained.

More in Europe