Local view for "http://purl.org/linkedpolitics/eu/plenary/2013-07-02-Speech-2-679-000"
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"en.20130702.54.2-679-000"2
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"Mr President, firstly I do want to thank my shadows, in particular Philippe Lamberts, Corien Wortmann-Kool, Wolf Klinz and Syed Kamall for their very constructive cooperation in producing the Parliament’s own-initiative report on banking reform. I welcome the fact that we achieved a consensus on the need for European structural reform of the banking sector.
I am satisfied that this report now gives the green light to the Commission to come forward with a legislative proposal and it does indeed demonstrate that Parliament supports the need for an EU framework for structural reform and as such I am grateful to my shadows and colleagues for supporting this report in tomorrow’s vote.
It is clear that we need a European framework which mitigates the potential fragmentation of European financial markets as a result of Member States introducing their own banking reform laws, including the UK, France, Germany and possibly Belgium and the Netherlands. Our proposals of course do not go into the detail of how structural reform should be implemented but instead provide several key principles to feed into the Commission consultation process, which finishes on 11 July, and the forthcoming legislative proposal.
Of course, the key objective of banking reform must be to deliver a safe, stable, effective and efficient banking system that operates in a competitive market economy and serves the needs of the real economy and of customers and consumers. Structural reform must stimulate economic growth – much needed growth in fact – by supporting the provision of credit to the economy, in particular to SMEs and start-ups; it must provide greater resilience against potential financial crises; it must restore trust and confidence in banks, which continue to be low.
As the Commissioner said, a recent survey found that 86% of the public believe that it will be at least five years before they trust a bank again. Structural reform should remove risk to public finances caused by banks being too big to fail and deliver a change in banking culture which too often is dominated by excessive risk-taking in the pursuit of profits.
Our reform principles focus therefore on reducing excessive risk, ensuring competition, reducing complexity and limiting interconnectedness in EU banks by separating banking activities that are essential for the real economy from risky trading and investment activities, ensuring the essential retail activities continue uninterrupted by problems caused by the investment arm, ensuring that risky trading activities do not benefit from implicit guarantees or subsidies or the use of insured deposits or tax payer bailouts, by ensuring those activities bear the risk and costs of the activities.
To those critics of reform who claim we are breaking up the universal banking model I would respond that nowhere in this report or in the High-Level Group report is there any proposal for a ban on banks carrying out any activities in investment services, market making or underwriting. Corporates will still have access to services provided by universal banks. What we are arguing for is a structured and responsible universal banking model to ensure banks deliver funding to the real economy.
Of course banking will always have risks, but ultimately those risks have to be borne and in a free and fair market economy they should not be borne by the taxpayer providing a very generous safety net.
Retail customers have no alternatives to their high street banks for access to essential payment, deposit and credit services and I would argue as legislators we have an overriding economic, social and political imperative to avoid disruption to the continuing provision of those services. Structural reform through separation therefore must be a part of the reform process.
Of course I would have wanted a more ambitious reform of banking structures. I would have wanted to enable full and legal separation where necessary, to make the socially vital part safer but ultimately this reform debate is more than the question of tackling the complexity of retail investment structures. It is also about the broader reforms of the culture of compensation around bonuses, it is about injecting competition into the banking system, it is about ensuring lending for growth, giving consumers the right to switch accounts."@en1
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