Bankers – they have become hate figures after the financial crisis, which spawned the economic crisis, and now the raiding of customers accounts in Cyprus to contribute to a bailout has turned up the heat.
As the European Banking Federation met in Brussels, euronews took the opportunity to talk to some of Europe’s top bankers, and observers, about the damage the crisis in Cyprus has done to their industry.
Chris Cummins, euronews: “Who do you trust with your money? Before last weekend you may have grudgingly said the banks. Now a nightmarish precedent has been set. In times of trouble your money is at risk. Cyprus may have voted against a raid on savers’ cash, but there has been a shattering breach of trust. Where do Europe’s banks go from here?”
Thierry Philipponnat, the Secretary General of Finance Watch, believes what happened in Cyprus was a very bad move: “ We have a Deposit Guarantee Scheme in the EU, and a decision not to respect that Deposit Guarantee Scheme is just a terrible decision, and the reason why it is terrible is in any jurisdiction if you don’t abide by your own rules trust just disappears.”
Christian Clausen, President of the European Banking Federation and CEO of Nordea Group, believes as a whole European banks are far more stable now than a few years ago.
He told euronews: “The banking sector in Europe now has twice as much capital that it had before the crisis, so I think by now it is more robust, but will grow more robust going forward. Savers can be absolutely certain that they will have their money when they approach the bank.”
Pat McArdle, Chairman of the EBF’s Economic and Monetary Affairs Committee, wants the industry to claw back public faith.
He said: “The banks are, and they have to, do their best to restore this trust. It is a business relationship between two sides and trust is a necessary part of that. So I think it is going to be a slow process, but it is one we will just have to work at.”
Cyprus is still deep in debt and its banks remain closed, savers may have been handed a reprieve, but the axe is waiting to fall somewhere.