Brussels, 22/03/2012 (Agence Europe) - The Greens/EFA Group at the European Parliament is recommending a different approach to bank capital requirements be taken to match the type of bank in question. It is calling for a binding liquidity ratio and has lodged amendments to the current updating of the CRD IV Directive to this effect.
On Thursday 22 March, Belgium's Philippe Lambert said that the challenge at present was to penalise action by banks that was a danger to the financial system without penalising funding of the real economy, wanting less stringent legislation for traditional banks, with their stable deposits and not much wheeling and dealing, and far tighter rules for the huge banks that carry out many different types of banking and trading. He said there were three types of banks - the traditional high street banks that lend to the real economy, whose Tier 1 solvency ratio the Greens/EFA recommend should be between 10.5% and 13%, and whose leveraged ratio should be below 3%; the dozen banks in Europe deemed too-big-to-fail (which should have a Tier 1 ratio of between 16% and 20% and a debt ratio of 9%); other banks, such as investment banks (Tier 1 ratio of between 15% and leverage ratio of 17.5%, debt ratio of 6%).
Speaking on behalf of J. Van Breda Bank, which lends to small businesses, Dirk Wouters criticised the undeniable competitive advantage of the big banks because they are deemed too-big-to-fail and it is assumed that their country of origin will always bail them out if necessary. Olivier Marquet, head of the bank Triodos Belgique, said he wanted to see a separation of traditional banking from speculation, and a ban on bonuses that encourage short-term risk. He also wants a ban on bankers doing transactions on their own behalf. (MB/transl.fl)