“It’s the banks and we’ll not let them get way” BorgTuesday, 08 November 2011
Swedish minister of Finance Anders Borg has been having jetty sleep of late and most of the time while sleeping he will suddenly wake up and say “It’s the banks and we’ll not let them get way”. Worried that the crisis is just beginning, he want to see serious action s taken about the banks' capital sufficiency.
It looks like Mr Borg is one of the few leaders in the EU who want to put the most stringent pressure on the banks such that any step they take, they think twice before making any move.
As EU finance ministers meet today in Brussels, among other things, to discuss how Europe's banks can strengthen their capital adequacy, the decision is already that the capital adequacy ratio will increase to 9 percent and the EU banking authority, EBA, believes that the banks then need to increase their capital by about 106 billion euros.
Swedish Finance Minister, Anders Borg, is worried about that now there are countries that are trying to water down the requirements for banks.
On the way to the EURO Fnance m9nister’s meeting, Borg barked “We must do what we have promised. EBA has said that we need about €100 billion and we should stick to that figure. It should not be watered down. We will not change the criteria and the ceiling the EBA set up.”
“Any form of blurring will cost in the form of loss of confidence” he frowned.
As Borg sees, the EU now has a lot of confidence problems to tackle. Confidence is running out and the greatest responsibility lies on the most heavily indebted countries, Greece and Italy.
Another item on the agenda is the issue of introducing a financial transaction tax, a measure strongly advocated by, for example, France and many in the EU Parliament. But the issue does not stand well with Sweden which fall in the group of EU countries led by the UK who believe that such a tax would only harm EU competitiveness, if not introduced globally.
“It is a very effective way to reduce growth in Europe and it would increase borrowing costs for indebted countries,” says Anders Borg, who tends to bring Sweden's experience of puppy tax as an argument that the financial transactions only move if they are subject to tax.
By Scancomark.se Team
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