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Commission wants stronger and more responsible banks in Europe
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Published on 20-07-11 

Banks have been at the centre of the recent financial crisis.  Determined to learn the lessons of the past and not repeat past mistakes, the European Commission is proposing to change the behaviour of the 8000 banks that operate in Europe  The overarching goal is to strengthen the resilience of the EU banking sector while ensuring that banks continue to finance economic activity and growth. The Commission's proposals have three concrete objectives:

  1. Require banks to hold more and better capital to resist future shocks. Institutions entered the last crisis with capital that was insufficient both in quantity and in quality, leading to unprecedented support from national authorities. International standards exist, known as the Basel III agreement, and have to be put into effect in Europe. 
  2. Set up a new governance framework giving supervisors new powers to monitor banks more closely and take action through possible sanctions when they spot risks, for example to reduce credit when it looks like it's growing into a bubble. 
  3. Have a Single Rule Book for banking regulation. This will improve both transparency and enforcement.
    Commissioner Michel Barnier

    Commissioner Michel Barnier

    Internal Market Commissioner Michel Barnier said "The financial crisis has hit European families and businesses hard. We cannot let such a crisis occur again and we cannot allow the actions of a few in the financial world to jeopardize our prosperity. That's why today, we have brought forward proposals to make the more than 8,000 banks that are active in Europe stronger. The banking sector will have to hold more capital and better quality capital every time it is taking risks It is a tremendously important step forward in learning the lessons from the crisis and adopting a new approach to risk.  I am pleased to note that Europe continues to take the lead and  is the first jurisdiction at a global level to transpose the G20 commitments. Only when all these rules are in place can we really say we've fully learnt the lessons of the crisis".

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    Last update: 26/07/2011  |Top