Germany's private banking trade body has today blasted a new piece of EU regulation aimed at increasing transparency and similarity across the EU's securities markets.
The second Markets in Financial Instruments Directive (Mifid II) was welcome in principal, according to the Association of German Banks' head Michael Kemmer.
But he said that the proposals would cost German banks €1bn and lead to an “information overload” for bank customers.
“Banking regulation has lost sight of the big picture,” said Kemmer. “A large number of good individual measures don’t necessarily make a coherent whole. At over 20,000 pages, the sheer size of Mifid II shows that it is mired in detail and goes far too far.”
Kemmer said that the requirement in Mifid II for firms to record certain calls which relate to transactions would “undermine the trust” between banks and consumers.
But Nick Bayley, a compliance expert at corporate advisory firm Duff & Phelps and former head of department in the Financial Conduct Authority, believed Kemmer's criticism might be misplaced.
“The requirements [on telephone recording] are there predominantly for investor protection and improve market surveillance,” said Bayley. “I think they do help protect consumers.”
He added that it was unlikely a bank would have to record all calls with consumers under Mifid II, since the new rules say that calls must only be recorded if they involve advice which leads to a securities transaction actually being executed.
Kemmer also complained that banks would have to send out “tons of paper” to comply with the information requirements in Mifid II.
“There are, I agree, several new requirements in Mifid II for firms to provide periodic information to their customers,” Bayley said.
“In some cases these requirements can be a bit burdensome for banks, but there’s nothing in there that you would say is unreasonable.”