FRANKFURT (Reuters) - Stricter international banking rules are costing German lenders around 9 billion euros ($12 billion) annually, a study of the sector by auditing firm KPMG estimated.
Following the financial crisis, regulators have forced banks to boost their capital and liquidity buffers better to withstand future market shocks. The new rules have also prodded banks to concentrate on safe business with retail or corporate customers and eschew risky trading for their own books.
KPMG’s study, which seeks to tally banks’ costs in complying with the new rules over 2010-2015, comes amid sparring between German Finance Minister Wolfgang Schaeuble and Deutsche Bank (DBKGn.DE) Co-Chief Executive Juergen Fitschen over whether regulation of the sector has gone far enough.
It was based on data from 20 German banks, from large lenders to regional and private banks, representing about 60 percent of the total assets of the German banking sector.
The study found that the lion’s share of the burden, or around 7 billion euros per year, comes from the indirect costs of meeting higher capital and liquidity requirements.
On top of that come direct costs of 2 billion euros, including about 1.4 billion for physical and personnel expenses and a further 600 million for a German banking levy aimed at stabilizing the financial markets.
About one euro in four spent by banks for internal projects from 2010-2012 was linked to the new regulatory demands on the sector, but this was expected to rise to one euro in three for the 2013-2015 period, KPMG said.
The high costs did not pose an existential threat to the sector, KPMG said.
“Most banks do not see their business models as fundamentally in question,” Ulrich Pukropski, head of financial services at KPMG, told a media briefing.
($1 = 0.7261 euros)
Reporting by Jonathan Gould; Editing by Anthony Barker