EU praised by the Lord(s)

Passive, lame, sitting on its hands… – the EU during the euro crisis?
Nothing of the sort.
In fact, the EU institutions all performed well during this `once -in-a-lifetime-crisis`.

Says who?
Says the British House of Lords, in an interesting overview of what post-2008 brought us in shape of financial regulations:
* The EU commission ”is to be admired” for its sheer output and workrate.
* The European Parliament has played ”a diligent role in its scrutiny of all aspects of the EU financial regulations framework”, not least has the Economic and Monetary Committé developed impressive expertise in these matters.
* Council President Van Rompuy played a great role in ensureing consistency and shaping the much-needed consensus.

And the result of all this diligence and hard work was unparallelled:
”Rules, supervision, and the institutional structure of supervision have all been affected in a way never before seen in democratic countries.”

Fine, but was it any good?
”We find that the bulk of the new regulatory framework was necessary and proportionate, and would have been implemented by the UK even if action had not been taken at EU level.”

Having said that, the Lords point out that some of it was rushed through without proper consultations, some parts could definitely be improved, we  may yet discover unintended consequences,  and at the end of the day, the risk remains that financial institutions too-big-to-fail really will fail and leave to tax payers to pick up the tab.
Lots more work to do!

Still left to be concerned about then, is the ”too-big-to-fail”banks.
The EU Commission has proposed a version of current US (Volcker) and British (Vickers) rules:
The 30 largest European banks would not be allowed to trade on for its own profit.
Other banks would be supervised and if their trading-for-their-own-profit looked like it would constitute a serious risk, they would be made to separate in two branches – one would encompass depositers’ savings , the other would constitute the banks trading-for-their-own-profit.

So, more lenient than in the US (Volcker) and in the UK  (Vickers).
European bankers still don´t like it.

Certainly, the Nordic banks really, really don´t like it. All the big Swedish banks would have to comply.
Luckily, the rapporteur in the European Parliament is Swedish (Mr Gunnar Hökmark) and he understands the worries of the banks.
So he has introduced a large number of changes – going their way – and he has (his words) a ”thin” majority in the Economic and Monetary Committe with him.

That is a concern for the House of Lords.
”We are concerned that the financial sector is overstating its objections in an effort to encourage the Commission to drop its proposals.”
The Lords feel that there´s a ”strong case for  consistency”.

In other words, if American and British banks can separate (as well as the German and French banks though in a smaller way), what´s so special about the rest of you?

The European Parliament will vote on the matter in April.



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