+++ 3. Oktober 2012 +++
Bank Separation: Steinbrück's Fence Is Very Low
Whereas the campaign for a return to the original Glass Steagall Act is gaining ground in the United States (cf. below), and has found prominent supporters in London, the debate in Germany on banking separation among political layers shows cowardice to address the real issue. Such is the case of the SPD, whose likely next chancellor candidate, Peer Steinbrück, presented Sept. 25 the results of the party's working group on financial reform which he presides. Avoiding any reference to the fight for a real Glass-Steagall, he endorsed an OECD proposal for bank separation under a common roof, which is similar to the "ring-fencing" recommended by the Vickers Commission in Britain.
The relevant section in the 30-page paper by former Finance Minister Steinbrück states: "For banks with complex business activities, it is difficult in individual cases for an outside person to determine whether a transaction represents proprietary trading, a reinsurance deal or a client's order. Therefore, at these banks, the deposit and loan branch should be protected in a second separation stage from this gray zone area of activities in investment banking. The necessary protection of the deposit and loan branch must not go so far, however, as to prevent big banks from exercising their services function for the real economy in their entirety..."
Therefore, he proposes a kind of holding company, where loans and deposits would be pursued in subsidiaries separate from those of investment banking and other branches. One Wall Street insider characterized Steinbrück's paper appropriately as "a really very low fence" which speculators could easily jump over.
Other proposals in the paper would further chip away at German sovereignty, such as the creation of a 200-billion-euro banking consolidation fund on a European level, to be paid into by the private banks, and a Eurozone-wide banking supervision agency at the European Central Bank. The better side of Steinbrück's plan is the call for bans on OTC transactions and on food and commodity derivatives trades, which are based exclusively on credits and/or have no link to a real economic business, and are done merely for the purpose of speculation.
The SPD, however, is not likely to make this a legislative issue now, and the paper is only designed to be incorporated in the party platform for the September 2013 national elections, and it would not become official policy before the end of next year – should Steinbrück become the new German Chancellor, of course.
~ deutsch + english ~
+++ 29. Mai 2013 +++
Banksters Wrote EU Legislation on Bail-in!
The global financial system is headed irrevocably toward collapse, and it will be far more violent than in 2007-2008, as independent voices in the financial community have warned. Just consider that t...