Association of German Banks criticise ‘?1bn MiFID II costs’

German banks will have to cover the ?1bn of costs needed to set?up the technical infrastructure required for MiFID II according to The Association of German Banks.

The new regulation undermines the trust between the customer and bank, and will create an information overload for bank customers according to Michael Kemmer, general manger of the association. ?We expect up to one billion euros to be spent on implementation, and that without the running costs. The banks could put that money to good use elsewhere,Kemmer said.

The ?1bn in costs are linked to setting up the infrastructure required to record every phone call related to investment advice. Along with an increased in costs, MiFID?II will also force all banks to fundamentally rethink their business models. ?There are already signs that banks will no longer be able to offer all their customers every service and every financial product?, he added.

The new Markets in Financial Instruments Directive (Mifid II) is due to come into force in January. The reforms are designed to make European markets safer, more transparent, and more efficient.

While MiFID II was in principle welcome, Kemmer has?openly?criticised banking regulators of having lost sight of the big picture. “A large number of good individual measures dont 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.p>

He also questions why it is also impossible for customers unable to opt out of telephone recordings. ?Such broad requirements to record telephone conversations help nobody and certainly arent in the customer interest. They merely undermine the trust between customer and bank. This aspect of MiFID?II needs to be reviewed and adjusted.p>

Copyright ? 2017 FinTech Global



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