Former Prime Miniser and Maltese MEP said one-size-fits all approach on small and medium sized banks operating in the south of Europe could reduce their financial flexibility and become uncompetitive with the larger banks in the north of Europe. Dr Sant made these comments after voting in favour of a resolution on the appointment of Mr Andrea Enria as the new Chair of the Supervisory Board within the European Central Bank at the European Parliament.

Sant said all banks need to be treated equally with the overall goal of improving financial integration in the Eurozone and reducing the dangers of excessive risk taking in the future.

Sant said Mr Enria’s outstanding experience in banking and financial regulation and supervision, as well as his independence will contribute to the successful continuity of the Single Supervisory Mechanism.

“However, in doing so, Mr Enria has to make sure that the new rules introduced with the Banking Union take into full account the changing operating costs of small and medium banks, especially in the southern economies of the Union, while keeping at bay any disproportionate rise in compliance costs. Harmonised rules are crucial to the architecture of that banking union. But this does not mean that a blind one-size fits-all approach would make sense. It could be detrimental to medium sized banks from the smaller economies by reducing their financial flexibility within their own relatively small environments, making them uncompetitive at home with the bigger northern banks. Unfortunately, regulatory and supervisory trends that go in this direction have already emerged.”

Mr Enria will hold the position for a period of five years, starting from 1 January 2019. As a supervisor, the European Central Bank has the authority to carry out inspections to check banks' compliance with EU rules, demand banks set aside additional capital to mitigate risks and can even withdraw banking licences.