New chance to get bank structure reform right, says Finance Watch

Brussels, 27 May 2015 - Last night’s rejection by the European Parliaments ECON Committee of Gunnar Hökmark MEP’s report on bank structure reform (BSR) provides an opportunity for a fresh start on BSR, said Finance Watch, the public interest advocacy group working to make finance serve society.

Christophe Nijdam, Secretary General of Finance Watch, said:

“Structural reform of the EU’s too-big-to-fail banks is essential if we are to restore trust in the banking sector and a level playing field among banks.  Last night, ECON rejected the Hökmark report, which would have added layers of administrative burden without benefiting the public interest. This is a victory for those who genuinely want to end too-big-to-fail banking.”

The vote allows ECON to make a new start, possibly with a new rapporteur, who will need to find a broader compromise that will better reflect society’s interests. The rapporteur should therefore be more open to negotiations and more sceptical about the lobby arguments used by those seeking to avoid reform. These include, for example, the claim that too-big-to-fail banking produces stable long term investment, despite evidence to the contrary.

Katarzyna Hanula-Bobbitt, Senior Public Affairs Officer at Finance Watch, said:

“The restart is an opportunity to show that the EU can deliver Better Regulation. The next phase must not be rushed: it is better to be slow and correct than fast and wrong. The Parliament can now focus on finding simple and transparent rules for bank structure reform that will guarantee financial stability and deliver the diversity of market players, competition and fair pricing of risks that would truly benefit the EU’s economy."

ENDS

Finance Watch materials on BSR: