Local view for "http://purl.org/linkedpolitics/eu/plenary/2006-07-03-Speech-1-078"
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"en.20060703.14.1-078"2
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".
Mr President, the Muscat report applauds the consolidation and merger and acquisition activity that has been taking place in pursuit of these elusive economies of scale and scope. However, I am not aware of any evidence that consumers are more satisfied, that risks have been reduced or that the cost of capital has been reduced. On the contrary, the main effects of the financial services action plan to date seem to be that financial services at all levels – retail banking, stockbroking, investment banking – are all being rather seriously hampered by onerous and largely unnecessary reporting requirements.
However, the issue I want to highlight – and which the report acknowledges – is crisis management, or, to put it more bluntly, who bails out. Sooner or later some large multinational bank is going to get into difficulties, not necessarily through bad management, but simply because banks, like any other business, can go bust. Banking, like any other business, is risky. There will be calls for bail-outs and guarantees to forestall contagion and to prevent the breakdown of the payment system. At that point, cooperation between the national authorities becomes non-cooperation, as each national authority strives to limit its own financial liability.
Nobody has thought this through. The report mentions the lender of last resort without telling us what it is or how it is going to work. So, instead of the blind pursuit of the single market in financial services, I believe it would be prudent not to encourage any more consolidation or cross-border merger activity for the present, until such time as the European Union has a single fiscal authority to take the potentially large financial responsibility when things go wrong. Fortunately, I think that time is very far in the future."@en1
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