/ world today news/ The finance ministers of the EU countries could not agree on new measures to prevent financial crises. Chief among them should be the emergence of a supervisory authority for all European Union banks.
But France insists that the ECB obey each of the 6 EU credit organizations. And Germany believes that only a few dozen of the largest banks in Europe should be controlled. The leaders of the EU countries already decided in the summer to expand the powers of the European Central Bank and transfer to it the functions of the national central banks, to give confidence to investors that the euro zone will not break up because of the troubled banks in Spain and Italy. This measure calmed the financial markets. But in practice, the effectiveness is low, according to the analyst Nataliya Smirnova: – If everyone is controlled, including the banks with an office in every city and every village in the entire European Union, then the state of supervisory security will greatly increase. These are pointless expenses that will not greatly affect the overall level of riskiness of the European banking system.
A renewed attempt to reach agreement on the amount of banks the ECB will oversee will be taken up by finance ministers next week. If the meeting ends in a draw again – the EU meeting on December 13-14 is fine. Although some analysts believe that common ground will not be easy to find, especially between Germany and France, and a decision will be delayed until early next year. Berlin, as before, fears that additional regulation of small German banks will only hurt them. Financier Andrey Lusnikov commented:
– The Germans fear that their agreement to such a deep reform of the finances in the Eurozone will cause resentment among their own representative bodies, and there will be protests from the population. Because even small German financial organizations will be put under the same control as structures in troubled countries like Greece.
The main goal of creating a pan-European supervisory body is the effort to prevent a situation similar to the collapse of the American bank Lehman Brothers, which became the starting point of the global crisis. But experts note: the bankruptcy of this company was only a consequence of the accelerating crisis. Therefore, the tightening of control over banks is not enough, centralization is needed in many other areas, including government spending and legislation in general.
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