BANKING Economic turmoil
Kroes to take tough stance on bail-outs
By Simon Taylor - 09.10.2008 / 00:00 CET
So far the European competition commissioner has approved most bank bail-outs and guarantees, but deeper probes could soon bring Neelie Kroes into conflict with national governments.
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© 2012 European Voice. All rights reserved.
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The selection of Jim Yong Kim gives cause for concern. |
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Financial firm's woes should serve as a warning to the EU. |
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Banks required to cap bankers' bonuses, increase capital buffers; Parliament endorses stricter budgetary surveillance of eurozone members. |
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NEELIE KROES Matching actions. REUTERS
Fact file
Bank rescues
õ Belgian-Dutch bank and insurer Fortis has been split in three over the last few days. On 3 October, the Dutch government completely nationalised Fortis's Dutch operations. The Belgian government will retain a blocking minority stake – 25% – in the bank's Belgian operations; France's BNP Paribas has bought the other 75%. BNP Paribas announced the take-over of 66% of Fortis's shares from the Luxembourg government.
õ The German government and a consortium consisting of banks and insurance companies agreed a €50bn rescue package to save the ailing commercial property lender, Hypo Real Estate, on 5 October.
õ On 30 September, another bank, Dexia, received a total of €6.4bn from the Belgian, French and Luxembourg governments.
õ Italy's biggest bank, UniCredit, received a capital boost of €6.6 billion.
õ The UK took on Bradford & Bingley's €54.3bn mortgage book and arranged a sale of its retail network and savings to Spain's Banco Santander for around €790 million.
õ On 8 October the UK government announced a €64bn fund to buy stakes in failing banks, a €260bn liquidity facility and a €322bn guarantee facility to cover financial institutions' refinancing needs.
Deposit guarantees
õ Ireland announced on 30 September it was providing guarantees to all deposits and loans with six Irish banks. The guarantees are estimated to cost the Irish government €400 billion. The Irish parliament has approved a framework law but must work on implementing legislation.
õ In Germany after Sunday's crisis mini-summit in Paris, German Chancellor Angela Merkel said: “We are telling all savings account holders that your deposits are safe. The federal government assures it.” Austria and Greece have made similar pledges to safeguard bank deposits.
õ Commercial banks in Denmark are to put €6.4 billion over the next two years into a fund to cover losses. There had been a limit of DKr300,000 (€40,200). Six regional banks in Denmark have already been saved or sold in the last month, including Roskilde Bank and Ebh Bank.
õ In Sweden, the government has decided to double the limit for deposit insurance from SKr250,000 to Skr500,000 (€51,000) from 6 October.
õ From 7 October the UK government raised the guarantee of savings of all depositors in British banks to £35,000 (€45,300).
The sorry saga of JPMorgan has major implications for banks across the European Union.
Talks will now begin with European Parliament on regulation of agencies.
Differences lead to postponement of vote.
Financial firm's woes should serve as a warning to the EU.
UK drops opposition to new rules on bank capital and liquidity.
