Tuesday

19th Mar 2024

Germany and UK want global financial regulator

  • One government alone cannot deal with the consequences of globalisation (Photo: Wikipedia)

The UK and Germany believe that a new international system regulating the financial sector must be constructed to prevent a repeat of global banking crisis in the future.

Peter Steinbrueck, Germany's Social-Democrat finance minister, raised on Sunday (21 September) the idea of "an international authority that will make the traffic rules for financial markets," while speaking to German radio, Reuters reports.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Meanwhile, UK Prime Minister Gordon Brown is to outline proposals for just such a body, run under the authority of the International Monetary fund, in a speech to the Labour Party conference on Monday, as well as domestic plans to crack down on "irresponsible" bonuses handed out in the City, London's financial quarter.

"I think what people haven't appreciated is we've now got global financial systems but we've only got national regulators to cover them," Mr Brown told the BBC ahead of the speech, adding that he had been trying to convince his international counterparts for years of the need for "a global system of financial regulation."

His finance minister, Alistair Darling, according to the country's Guardian newspaper, is also set to tell his fellow Labour Party members: "Just as one government alone cannot combat global terrorism, just as one government alone cannot combat climate change, so one government alone cannot deal with the consequences of globalisation."

Mr Brown will be pressing world leaders to sign up to such a plan when he visits New York on Thursday for a meeting of the UN General Assembly.

Meanwhile, Germany's chancellor, Angela Merkel, has publicly chastised the US and UK for historical opposition to stronger financial regulation.

Speaking to an election rally in Austria over the weekend, Ms Merkel said: "Today we have come further because now America and Great Britain are also saying 'Yes, we need more transparency, we need better standards for rating agencies'."

The chancellor was referring to US and UK opposition to Berlin plans for greater oversight of hedge funds proposed last June at a G8 meeting.

"We played ball, we adopted a nice EU directive into national law, we had to cope with a lot of complaints from medium sized enterprises, and at the end of the day, the Americans said: we won't," the chancellor said.

In related news, the European Commission is to propose stricter conditions for banks offering credit to other financial institutions, according to draft documents first seen by the Financial Times Deutschland. Banks would now have to say if they maintain part of the risk in their own accounts when offering credit, according to proposals set to be approved by the commission on Wednesday.

Elsewhere, European banks have been lobbying hard to win support under the framework of the $700 billion bail-out of Wall Street announced on Friday by US treasury secretary Henry Paulson.

Banks such as UBS and Credit Suisse, which have significant operations in the US are likely to be eligible for part of the US Treasury's planned buy-out of bad debt held by American financial institutions.

"It's a distinction without a difference whether it's a foreign or a US one," Mr Paulson told the Fox News channel.

However, to participate in the scheme, he suggested that European taxpayers would also have to take part in bankrolling the biggest bail-out of private firms in world history: "Our system's a global one, and I also am going to be pressing colleagues around the world to design similar systems for their banks," he said.

"We are talking very aggressively with other countries around the world, and encouraging them to do similar things, and I believe a number of them will," Mr Paulson said.

EU supply chain law fails, with 14 states failing to back it

Member states failed on Wednesday to agree to the EU's long-awaited Corporate Sustainable Due Diligence Directive, after 13 EU ambassadors declared abstention and one, Sweden, expressed opposition (there was no formal vote), EUobserver has learned.

Latest News

  1. Borrell: 'Israel provoking famine', urges more aid access
  2. Europol: Israel-Gaza galvanising Jihadist recruitment in Europe
  3. EU to agree Israeli-settler blacklist, Borrell says
  4. EU ministers keen to use Russian profits for Ukraine ammo
  5. Call to change EIB defence spending rules hits scepticism
  6. Potential legal avenues to prosecute Navalny's killers
  7. EU summit, Gaza, Ukraine, reforms in focus this WEEK
  8. The present and future dystopia of political micro-targeting ads

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

EU news that matters

Join us