By Ulrike Dauer and Eyk Henning
FRANKFURT--Europe's planned single banking supervisory body
should oversee all banks, not only the large ones that are
considered systemically relevant, Commerzbank AG (CBK.XE) Chief
Executive Martin Blessing said Wednesday.
"It is crucial that all banks are subject to uniform rules," Mr.
Blessing told a banking conference, adding that regulatory
arbitrage must be avoided and recent experience showed that savings
banks can also be systemically relevant.
He also said the widely discussed separation of investment
banking from the rest of a bank's operations wouldn't solve any
problems. He said the collapsed Lehman Bros. was a fully fledged
investment bank bank and Hypo Real Estate, which was put under full
German government ownership after it required billions of euros,
was a pure credit bank.
The discussion is limited to exhausting "symbolism but doesn't
tackle the real issues," Mr. Blessing said.
Better regulation of the derivatives market and of non-bank
financial institutions, or shadow banks, would do more toward
solving the problems than discussions about separating out
investment banks, Mr. Blessing said.
Overall, the banking sector expects lower profits, he said,
echoing comments Tuesday by Deutsche Bank AG (CB) Co-Chief
Executive Juergen Fitschen.
Commerzbank, in which the German government holds a 25% stake,
is expected to announce further restructuring of its retail banking
operations in November. The bank already has substantially reduced
business and won't resume ship financing for some time, Mr.
Blessing said. It is, however, "very happy" with its Polish unit,
BRE Bank SA (BRE.WA), and will continue on the growth path and
invest in Central and Eastern Europe, he said.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com and Eyk
Henning at eyk.henning@dowjones.com