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Banking Union still doesn’t protect taxpayers against ‘too big to fail’ banks

10/03/2016

Banking Union still doesn’t protect taxpayers against ‘too big to fail’ banks

GUE/NGL MEPs have denounced the first annual report on the Banking Union which was presented in the European Parliament today, because it fails to deal with the real problems and risks in the banking sector.

GUE/NGL Co-Shadow Rapporteur on the report, Rina Ronja Kari, explained: "When the big banks were saved during the financial crisis with taxpayers' money, it was because the banks had become 'too big to fail'. If they had not been bailed out, they would have gone bankrupt and pulled the rest of society down with them."

"Eight years after the beginning of the financial crisis, the European banking sector is even bigger and even more concentrated. Yet, there is still no legislation that addresses the issue of 'too big to fail' banks.

"The Banking Union annual report would have been a good opportunity to put this problem on the agenda, but the European Parliament has failed to do that.

"In addition, the Banking Union's President, Mario Draghi, is part of the G30; a club of bank governors that he is also supposed to supervise.

"We cannot allow this and we cannot support this uncritical report," Ronja Kari concluded.

GUE/NGL Co-Shadow Rapporteur, Miguel Urbán, highlighted the inequalities that have been reinforced by the Banking Union: "Eight years after the beginning of the crisis, the banking sector has received over 7 billion euros of public funds, yet the banks in the north are still subject to risk. Some are even exposed to risk in the magnitude of 20 percent of German GDP."

"We must ask: Has it really been a success to bring structural reforms to countries of Southern Europe that are still very vulnerable and whose populations are still in poverty?

"The Banking Union's supervisory body was also involved in the coup against the Greek public in recent years. This has had a catastrophic impact on Greek sovereignty.

"These institutions are a danger to the sovereignty of Europe. We have to be able to change this situation."

GUE/NGL Coordinator on the Economic and Monetary Affairs Committee, Marisa Matias, added: "The most important thing is to address what needs to be done now. For example, the single supervisory mechanism is not going to be sufficient - it's just a hint of a measure that needs to be strengthened. We also need better wind-up resolution mechanisms."

German MEP, Fabio De Masi, warned of the dangers of the current trajectory of the Banking Union: "A new financial crisis is looming. The casinos are expanding faster than the real economy because the EU is sliding into a coma and the money of the central banks and the super rich doesn't know which way to go despite the negative interest rates."

"Small savers must be protected, but at the same time, we must avoid creating loopholes for the big banks.

"The savings and lending business of banks must be separated from the investment banks, so that 'zombie banks' can no longer blackmail the taxpayer.

"We need a state-backed guarantee scheme for small savers and pensioners, but not for casino banks," De Masi concluded.

 

GUE/NGL Press Contact:
Nikki Sullings  +32 483 03 55 75
Gay Kavanagh  +32 473 84 23 20

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