Local view for "http://purl.org/linkedpolitics/eu/plenary/2007-09-05-Speech-3-185"
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"en.20070905.21.3-185"2
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"Mr President, the cost of August’s turbulence on the financial markets has not yet emerged. The Commission – we have just heard – is expecting a negative impact on growth. The real losses suffered by the banks and other financial players will become apparent when their annual accounts are drawn up.
According to Commissioner Almunia, we still lack information about the actual, overall exposure of all the players. The fact that those who took risks that were too great are footing the bill is a salutary principle, but behind the speculative activism of the financial world, there are victims: the families caught in the trap of mortgage lending based on the promise of unlimited growth in the property market and small investors directed to risks that were undervalued by all those living off fat commissions, including the credit rating agencies.
The Socialist group has been asking for years for increased supervision of hedge funds and all the special instruments being endlessly multiplied by the markets. As Carlo Ciampi maintains, the tumultuous development of derivative products is free from any kind of control. Even the directors of major banks no longer understand these opaque instruments. The real risks, for example the property loans, are sliced up ad infinitum, and repeatedly included in investment fund products and stock exchange instruments, with the result that nobody can locate the original risk any more.
The market expects the central banks to come to the rescue of the speculators. The ECB did in fact, in its role as lender of last resort. One might therefore ask why the ECB has had to inject more capital than the Federal Reserve into the market when it suddenly became illiquid, even though the sub-prime crisis came from the United States. Were the European banks more gullible? Did the supervisory authorities fail to do their job properly? The Socialist group demands that the Commission should learn lessons from the financial market, which has become too opaque and therefore extremely dangerous for the real economy."@en1
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