Local view for "http://purl.org/linkedpolitics/eu/plenary/2009-05-06-Speech-3-078"
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"en.20090506.3.3-078"2
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"Thank you, Mr President. We have now gone through a global financial meltdown and it is continuing to cause us problems. We need then to analyse why this has happened before we begin to act at EU level. I would like to say the following. Firstly, we have an ownerless capitalism. The large companies are no longer governed by their shareholders, but by pension funds, insurance companies and other types of fund. This leads to a situation in which officials can govern however they want to, and they do this in a way that suits their own interests, which are in increasing the risks enormously, and then the result is what we are seeing now. We have banks that are ‘too big to fail’, as the catchphrase goes. The Glass-Steagall Act was intended to prevent this, but it has been abolished in the US. We ought to consider whether this might not be part of the solution. We have deposit guarantees for small-scale savers and even quite large-scale savers. This means that people depositing money in banks do not give two hoots whether the banks are safe, as they know that taxpayers will protect them. This is a problem. The heads of the central banks do not burst the bubbles, but rather are praised when they constantly ensure that the bubbles can continue to grow
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Alan Greenspan gained an immensely good reputation for something which, in practice, is a significant explanation for why things have become so bad. Subprime lending was the start of this and a fundamental part, and it was introduced by politicians who are now saying that we will solve this by taking more power away from the market. I doubt that. The regulatory system in Basel II was circumvented by means of shadow banking. Now we are talking about new rules for capital. If this is more shadow banking, it is not going to help. I therefore believe that we should tackle this in a different way and ask what should be done. Then we will discover that very little should be done at EU level. This is a global problem and should be dealt with elsewhere."@en1
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