Banking supervision and consumer protection. The Italian perspective.

Transcription

1 Banking supervision and consumer protection. The Italian perspective. Avv. Marino Perassi Avvocato generale General Counsel Banca d Italia ---- Santiago Chile October 25 TH, 2013

2 The Italian Constitution and the laws on banking Italian Constitution; article 47, par. 1: The Republic encourages and safeguards savings in all forms. _ It regulates, co-ordinates and oversees the operation of credit Consolidated law on banking (Banking law: 1993) article 5, par. 1: The credit authorities shall exercise the powers of supervision conferred on them by this Legislative Decree having regard to the sound and prudent management of the persons subject to supervision, to the overall stability, efficiency and competitiveness of the financial system and to compliance with provisions concerning credit 1

3 and on finance Consolidated law on finance (1998, as amended in 2007 implementation_of_eu_directive)_article_5,_par._1: The objectives of supervisory activities indicated in this section shall be: a) the safeguarding of faith in the financial system b) the protection of investors c) the stability and correct operation of the financial system d) competitiveness of the financial system e) the observance of financial provisions 2

4 The traditional approach in banking supervision Stability of financial intermediaries and financial system Transparency as a tool to ensure full set of information for clients and enhance fair competition among banks Transparency as a tool to enhance competitiveness also of the banking system (original version of the banking law 1993) 3

5 Contracts and banking law Some mandatory provisions aimed at protecting clients (e.g. Banking contracts to be agreed in written form) Obligatory clauses to be inserted in standard banking contracts Clauses infringing mandatory rules may be declared null and void in court upon request by the client only 4

6 Contracts and the law. Developments A growing number of fair conditions in banking contracts imposed by law (EU and domestic rules) EU: uniform rules concerning contracts on payment services and standard mandatory provisions on payment means. The driving force of the single currency ( ) Italian framework (since 2006): mandatory clauses to be inserted in banking contracts: e.g. current accounts and mortgages 5

7 Basel II Legal risk as a component of operational risk Extensive litigation may generate financial losses and reputation risk Compliance with transparency rules and fairness in the relationships with clients become an issue for prudential supervision 6

8 Protection of clients as a task of supervision In payment systems: article of the Banking law (as amended in 2010: protection of payment services users) In banking contracts: article 127 of the Banking law (as amended in 2010, in addition to traditional objectives the supervisory action shall ensure the fairness of relationships with clients) The new challenge for supervision: to ensure the implementation of transparency and fairness, without any external and unduly interference in the banking business 7

9 The role of the supervisor in the italian framework Adoption of rules concerning the organization of banking business, to ensure transparency and fairness towards clients. The infringement of these rules is sanctioned. Adoption of administrative sanctions also in case of violations of rules on fairness in banking contracts and in the agreements concerning payment means and services. Issuance of administrative orders concerning banking contracts (art. 128 ter of the Banking law as amended in 2010) Banca d Italia as the redress authority in case of complaints in the area of payment services (implementation of Directive 2007/64/EC, in 2010) 8

10 The private enforcement The remedies offered by private law (legal actions before courts) as a mean to enforce rules and principles laid down in the law to regulate business areas where public interest is relevant The issue of small claims. The s.c. class action as a suitable tool The role of the settlements out of the court and the Alternative Dispute Resolution systems (ADR) 9

11 ADR and public enforcement in Italian banking law The Arbitro bancario finanziario (ABF, established in October 2009) as an effective ADR in the banking sector under art. 128 bis of the Banking law The competence of the ABF: claims related to banking contracts not exceeding the amount of EUR The increasing number of appeals before ABF as a sign of the demand of equitable justice in banking sector (October December 2010: n. 3409; 2011 n. 3578; 2012 n. 5653) 10

12 ABF. Some details The composition of ABF: three panels of five members each, located in three main cities in Italy. Three members, including the chairman, appointed by Banca d Italia; one member appointed by Italian Banking Association and one appointed by the association of banking clients The ABF proceeding. Quick and cost free The ABF decisions: enforcement by way of moral suasion. The publication of the decision is the sanction for non-compliance. Negative consequences on reputation ground for financial intermediaries 11

13 ADR and banking supervision The ABF is an independent body. No influence by the supervisor. The role of Banca d Italia is limited to technical support Decisions taken by ABF and administrative measures adopted by the supervisor may both ensure the implementation of the rules on the protection of clients The decisions of ABF as a guidance for banks in their relations with clients. They may offer an additional source of information to the supervisory body 12

14 The SSM. The way ahead No specific provision on the protection of savings in the EU Treaties. The principle of conferral under article 5, paragraph 1, of the Treaty on European Union The TFEU and its traditional approach to banking supervision: stability of intermediaries only (article 127, par. 6 of the Treaty on the Functioning of the European Union and article 25 of the ESCB/ECB Statute: prudential supervision) The draft regulation on SSM, recitals nn , consumer protection among the tasks not transferred to the ECB. 13

15 Final remarks Transparency and fairness in the relations among banks and their clients may contribute to foster competition and preserve stability There is an increased awareness of that positive effect and the Italian legislation in the post-crisis framework follows this approach The new EU framework in banking supervision stays on the traditional ground, entrusting the ECB only with supervisory functions limited to prudential supervision 14

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