Corporate banking regulation 'suffocating European recovery'

European corporate banking executives have warned that industry regulation and the resultant uncertainty are in danger of smothering the continent's economic recovery.

In interviews with Financial News, the bosses stated levels of investment and lending are being stifled by the level of sector reform, at a time when businesses need credit more than ever.

Allegra Berman, vice-chairman of global capital markets at UBS, commented it is "virtually impossible" to devise an effective strategy when the rules keep changing and uncertainty hangs over the sector.

Selwyn Blair-Ford, head of global regulatory policy at risk management consultancy FRSGlobal, said: "This feeling of powerlessness means the industry isn't concentrating on exploring investments or boosting the wider economy, instead they're trying to protect themselves from the next regulatory or political hit."

Heavily regulated European markets will also lose out on business to their less restrictive equivalents in Asia in the coming years, argued RCM global chief investment officer Andreas Utermann.

Last month, the Euro Coin Index reported the European economy actually strengthened in November as a result of greater optimism among business leaders and consumers.ADNFCR-2318-ID-800286860-ADNFCR