"The upcoming Brexit will lead to a break in the integrity of the European banking system and a further decrease in the profitability and value of European banks," Sechin said at the Eurasian Economic Forum.
According to the Rosneft CEO, half of all European state bonds and 20 per cent of investment-grade debt securities had negative returns in the middle of the year, while the lack of the necessary investment tools led to a significant drop in the capitalization of European banks — over five years, the Euro Stoxx bank index fell by half.
"The European economy is in a difficult position. Negative interest rates have had a significant impact on the profitability of European financial markets and the efficiency of the banking system in Europe," Sechin said.
He noted that ten years ago, the profit of leading European banks was 30 per cent higher than that of their US competitors.
"Now the situation has radically changed, and European banks are noticeably inferior to US banks, profits of which are three times higher. Moreover, a $399 billion capitalization of the US bank JP Morgan alone, is above the total capitalization of the five largest European banks," the head of Rosneft stressed.
The 12th annual Eurasian Economic Forum "Business Connecting Eurasia Dialogue - From the Atlantic to the Pacific" is taking place in the Italian city of Verona and will last until 25 October.
On US Influencing the European Banking System
The United States' growing influence on the European banking system's activity leads to a loss in the potential for the euro to establish itself as a global reserve currency, Igor Sechin said.
"The increase in US influence on the functioning of the European banking system leads not only to a decrease in its effectiveness, but also to the loss of the possibility of the euro's formation as a global reserve currency," Sechin said at the Eurasian Economic Forum in Italy's Verona.
According to the Rosneft chief, US regulators are increasingly using fines as an instrument of pressure on the European banking system, having imposed about $18 billion in fines on European banks from 2008 to 2018.
"US regulators, taking advantage of the extraterritoriality of their legislation, accuse European banks of violating US sanctions against Iran and other countries or of alleged money laundering," the top manager said.
Under the threat of fines and exclusion from the system of dollar payments, European banks are forced to terminate contacts with countries disliked by the United States, ignoring their own business interests, Sechin said.
"In a situation where the United States is manipulating interest rates and abusing the position in the global economy, we must once again ask ourselves, should the dollar be the world's reserve and trading currency? Is it possible in the current conditions to rely on the United States as a source of stability for the global economy and energy? The question is rhetorical," he concluded.
Russia, as well as some of its trading partners, including China, have long been seeking more active use of national currencies in bilateral and international transactions in a bid to reduce reliance on the US dollar amid Washington's sanctions policy and US-China trade row.
Russia and Brussels have also been discussing the possibility of using national currencies instead of the US dollar for bilateral trade deals. On 13 June, Russian Finance Minister Anton Siluanov met with Maros Sefcovic, the vice president of the European Commission for the Energy Union, to discuss the creation of a working group that would facilitate the process.
