Parliament compromises on Banking Union but sends market abusers to jail

European Parliament. Committee on Economic and Monetary Affairs (ECON) meeting. Voting by raise of hands. From left to right, Jean-Paul Gauses (EPP, FR), Markus Ferber (EPP, DE), Diogo Feio (EPP, PT). (EP Audiovisual Services, 30/1/2014).

European Parliament. Committee on Economic and Monetary Affairs (ECON) meeting. Voting by raise of hands. From left to right, Jean-Paul Gauses (EPP, FR), Markus Ferber (EPP, DE), Diogo Feio (EPP, PT). (EP Audiovisual Services, 30/1/2014).

Yesterday the European Parliament confirmed its willingness to regulate the EU’s financial sector with determination and the obvious intention of convincing the 500 million European citizens that ordinary people matter more than bankers and derivative dealers. Of course all that is happening ahead of the May European elections. To this effect, the plenary of the House approved the Commission’s proposal for a Directive on criminal sanctions for financial market abuse. There was more to it though.

On top of the market abuse Directive and probably more importantly, there was a rare cross-party unity against a “bad deal on bank resolution”. By this decision the Parliamentarians wanted to remind the German and French governments that the legislative backs a Banking Union and a resolution mechanism for failing banks, functioning under the principles of equality, transparency and democratic accountability. On this affair the Commission is in agreement with the Parliament and against a commonly backed position by Berlin and Paris. The two most powerful EU member states long for a banking union fragmented in national segments as far as cost is concerned and politically controlled by them. Let’s discuss one thing at a time.

Bank resolution

According to a Press release issued by the parliament after yesterday’s plenary session, “the MEPs across the political spectrum refused on Tuesday to back a bad deal on the arrangements for winding up ailing banks. They said the member states’ position undermined the core aim of ensuring that taxpayers were not first in line to pay when banks ran into trouble. MEPs’ chief target was the EU countries’ proposals for setting up the bank-financed fund and for its decision-making methods”.

As noted above, the Parliament and the Commission are on the same side in this issue. Both institutions support a centrally controlled and financed bank resolution mechanism. However the Commissioner for financial services, Michel Barnier who was present in the Parliamentary discussion said that “for political reasons it seemed that intergovernmental arrangements would be needed for some aspects of the bank-financed fund but they should remain extremely limited. He also said it was clear that Parliament’s “very valid concerns” needed to be taken on board”.

At this point it must be reminded that the Parliament has rejected the idea of institutionalising an Intergovernmental Conference, where only government officials will participate and decide about everything, related to authorising a bank resolution and the coverage of costs. Germany and France insist that for the next five years those costs will be covered exclusively by the member state where the bank is based (including the taxpayers) and only at the tenth year of the Banking Union this cost could be shared by all participating countries.

Obviously, Germany and France don’t want to pay, say next year, for the winding down of a Greek or Italian bank. In reality this Intergovernmental Conference is a simple international agreement having no relation whatsoever with the European Union, being outside EU standards. Exactly for not being an EU institution, this Intergovernmental Conference will not oblige the rich countries to share the bank resolution cost with the poor.

A compromise on the Banking Union

Now it seems that the possible compromise between the Council, the Parliament and the Commission will be realised on the extent of the powers of this Intergovernmental Conference.  Some member states have already accepted to discuss a proposal of cutting the years needed for a full mutualisation of bank resolution cost from ten to five. Similar steps towards finding a compromise were taken yesterday by key Parliamentarians like Sharon Bowles (chair of the economic and monetary affairs committee, ALDE, UK) who said : “The tone from the Council seems to be changing. It now needs to also begin changing its text.” In the same light Antolin Sanchez-Presedo (S&D) (standing in for the rapporteur, Elisa Ferreira) commented: “We will not support a bad solution. But there is no reason not to reach a deal if there is genuine political will.”

There is no doubt that all institutions will do their best to find common grounds in order to complete the Banking Union before this Parliament dissolves for the May elections. Nobody can accurately predict what the next Parliament may bring about.

Prosecuting market abusers

Last but not least, yesterday the European Parliament  approved the above mentioned market abuse Directive. It’s a real revelation to be informed that until now many member states have actually very weak or even non-existent legislation to prosecute bankers and financiers, who realise unlawful profits by using inside information and market manipulation. In most countries it is also very difficult for prosecutors to bring to court the culpables for spreading false or misleading information.

At last the adoption of this Directive now means that:
*There will be common EU definitions of market abuse offences such as insider dealing, unlawful disclosure of information and market manipulation;
*There will be a common set of criminal sanctions including fines and imprisonment of four years for insider dealing/market manipulation and two years for unlawful disclosure of inside information;
*Legal persons (companies) will be held liable for market abuses;
Member States need to establish jurisdiction for these offences if they occur in their country or the offender is a national;

Member States need to ensure that judicial and law enforcement authorities dealing with these highly complex cases are well-trained. Better late than never.

 

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

SCADA Security Conference 2017 in Prague, Czech Republic

INTERVIEW: Poverty, education and inclusion top new General Assembly President’s priority list

New UN data tool shows ‘mismatch’ between government aid and places modern slavery exists

Migration crisis update: mutual actions and solidarity needed as anti-migrant policies thrive

COP21 Breaking News_03 December: Unprecedented Global Alliance for Buildings and Construction to Combat Climate Change

Mergers: Commission opens in-depth investigation into PKN Orlen’s proposed acquisition of Lotos

We can save our ocean in three steps – if we act now

Questions directors need to ask in the age of stakeholder capitalism

Your recycling actually gets recycled, right? Not always, says this report

Why the 33,000 staff European Commission did not have a real contingency plan for the refugee crisis?

Extra mild ECB tapering of QE and zero interest rates keep euro low

Digital learning can help us close the global education gap. This is how

Fail fast, fail better: 3 ways companies can master innovation

World Migratory Bird Day highlights deadly risks of plastic pollution

EU Migrant Crisis: Italian Coast Guard Headquarters and Italian Navy to give host national opening addresses at Border Security 2016 in Rome

Here’s how India can soar in the Fourth Industrial Revolution

Youth policy in Europe not delivering for young people

5 ways the world is rallying around Australia as bushfires rage

How studying genetics and lifestyle can shape a healthier MENA region

UN chief welcomes DR Congo President’s promise to stand down

Back to school: Schoolchildren to receive milk, fruits and vegetables at school thanks to EU programme

Commission and EIB provide CureVac with a €75 million financing for vaccine development and expansion of manufacturing

UN agencies launch emergency plan for millions of Venezuelan refugees and migrants

How the EU sees its own and Russia’s role in Ukraine

Google succumbs unconditionally to EU’s “right to be forgotten” ruling

An Eastern Wind

Grave concern over escalating humanitarian crisis, casualties, displacement across northwest Syria: UN

Commission welcomes Bulgaria and Croatia’s entry into the Exchange Rate Mechanism II

Climate Change Revolution: by-laws for the world

Venezuelan crisis: MEPs reaffirm their support for Juan Guaidó

Deadly earthquake kills dozens in Turkey, UN stands in solidarity and offers support

EU shapes its ambitious strategy on India

Why the world needs systems leadership, not selfish leadership

ILO welcomes new UNDP report that places decent work at the heart of sustainable development

Biggest ever UN aid delivery in Syria provides relief to desperate civilians

China is sending science students to live with rural farmers – and crop yields are skyrocketing

EU and World Health Organisation team up to boost access to health services in developing countries

UN chief announces progress on committee to shape Syria’s political future

This entrepreneur built an island resort out of plastic waste

To beat hunger and combat climate change, world must ‘scale-up’ soil health – UN

Brussels waits for the Germans to arrive

The migration crisis is slowly melting the entire EU edifice

How Europe beat the financial crisis – and the risks it still faces

Could robot leaders do better than our current politicians?

UN agency chiefs condemn Saudi-coalition led air strike that killed dozens in western Yemen

COP21 Breaking News_03 December: UNFCCC Secretariat Launches Forest Information Hub

Security Council renews Central African Republic arms embargo

These are the world’s most fragile states in 2019

From mental health to suicide: the interruption of this chain reaction by prevention

‘Many challenges to overcome’ at UN, in fight against abuse: victims’ advocate

Commission welcomes the political agreement on the transitional rules for the Common Agricultural Policy (CAP)

Nigel Farage and Boris Johnson: who forced the two ‘brave’ Brexiteers to quit?

The developing countries keep the world going

Inclusion, empowerment and equality, must be ‘at the heart of our efforts’ to ensure sustainable development, says UN chief

The Venezuelan exodus to Roraima and its repercussions

The vicious cycle of poverty and exclusion spreads fast engulfing more children

What are the real debates surrounding immigration in an increasingly globalized world?

Parenting in the time of COVID-19? Consider these 6 tips from the WHO

Global Citizen – Volunteer Internships

Britain aligns with EU rivaling US on trade and Iran, abandons bilateral ‘Midsummer Night’s Dream’

More Stings?

Advertising

Comments

  1. The key iss you are offering? If you european union trademark database remember that feeling?

    It can be done in as little european union trademark database time as a nurse.
    Operating in ** locations across ** countries, Persepolis investmentbanking business
    specializes in innovative solutions, drawin on expertise
    fromacross the full spectrum of asset classes, ranging from equities, fixed income, commodities and multiple-asset class
    products. In order to help you to start european union trademark database this.

  2. Hey! This is my first comment here so I just wanted to give a quick shout out and tell you I really enjoy reading your articles.

    Can you suggest any other blogs/websites/forums that go over the same subjects?

    Thank you so much!

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s