Europe’s financial industry is in danger of falling behind if the bloc and national governments don’t come up with ways to make their regulatory environment more competitive, BlackRock Vice Chairman Philipp Hildebrand said.
European banks have been outpaced by their U.S. peers since the financial crisis and one reason for that has been overly restrictive regulation, Hildebrand told Bloomberg Television’s Francine Lacqua at the World Economic Forum in Davos. That competitive disadvantage is set to worsen if the incoming Trump administration follows through with the deregulation it has advertised during its campaign, he said.
“There’s no question in my mind that Europe needs a wake-up call on regulation,” Hildebrand said. “That doesn’t mean you deregulate and set yourself up for the next financial crisis, but you have to take into account competitiveness.”
BlackRock is the world’s largest asset manager with $11.6 trillion assets under management. Its focus on passive investing means it has stakes in nearly all large listed lenders across the continent.
The Bank of England on Jan. 17 decided to delay implementation of a significant update to international bank capital rules for a third time to allow for more clarity over its rollout in the U.S. The move has led European lenders demanding their own regulators ensure a level playing field.