Sven Giegold

Another present for the big risky banks? No way! Stop bank subsidies

Dear colleagues and friends,

In the future banks across Europe can normally not rely anymore on tax-payers’ money to protect them from the consequences of their risky behaviour. Future losses will only be made good at the expense of owners and creditors or if this is not sufficient from a bank rescue fund funded by the banks themselves. This is good news for the stability of financial markets and for tax-payers who should never again have to pay for the risky behaviour of the banks.

However, the latest proposals by the European Commission, being drafted during the summer break, suggest that the contributions to the bank rescue funds should be calculated mainly by the size of banks‘ balance-sheets rather than according to riskiness of banks‘ behaviour. Bread-and-butter banks, building societies and credit unions, who are unlikely to ever make demands on the fund, will be required to subsidize the casino activities of investment banks. With the building societies bailing out Barclays and its ilk we really will see the world turned upside down!

Greens in the European Parliament initiated a successful campaign so that contributions to the rescue fund should be proportional to risk: banks with high systemic risk are now legally required to pay additional fees and prior membership of an institutional guarantee system will be considered when premiums are calculated. But in a sleight of hand this clear intention of lawmakers is about to be disregarded in the fine print of a so called ‚delegated legal act‘ of the European Commission detailing the EU’s Bank Resolution Directive.

In particular the French, the Dutch and the Italian governments, the European Central Bank and the European Commission are exerting pressure in the wrong direction, to protect exactly those banks whose risk-taking caused the crisis.

In cooperation with my Green MEP colleagues Philippe Lamberts (Belgium), Molly Scott Cato (UK), Bas Eickhout (Netherlands) and Ernest Urtasun (Spain) I have launched a website in six languages to shed light on these practices of preparing another present for the big banks.

You can find the website with important documents making clear what is being stitched up in technical language and during the summer holiday here:  http://www.stop-bank-subsidies.eu/

 

Best regards,

Sven Giegold

Rubrik: Unkategorisiert

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