Diplomatic Economic Club® Since 1997
LV EN RU News Trade Fair Riga Members area Articles
  • Contact ☰ menu ✕

    The EU measures to manage the financial sector: expected effects for banks  

    Eugene Eteris, European Integration Institute, Denmark, LLD, prof.
    The economic and financial crisis in the EU has had a negative effect on both public and private sectors: the latter being affected, generally, through banks. It is generally recognised that the bankers practice brought national economies to the brink of ruin. The EUs massive efforts to exert control over financial sectors institutions through numerous efforts since the end of 2008 are generally regarded as quite efficient, except for some sectors and a few countries.
    The article is prepared for the Round Table „Baltic States’ bank sector: lessons from the modern crisis“, organised by the Baltic International Academy, Latvian Employers Association and International Web-Magazine „The Baltic Course“ on 24st of February in Riga, Latvia.

    The negative effect of financial institutions on economies was felt in all EU member states and in both private and public sectors. First public reaction was to bailout the falling banks: e.g. in the Baltics, with the most vivid example of privatized Parex Bank, though examples are numerous in other EU states as well on another side of the Atlantic. When the financial crisis went deeper into the economic spheres and „returned“ in full swing into the public sector (in the periods beginning at the end of 2008- start of 2009) only big and powerful states could afford „saving“ the banks. In 2009 most of the EU members adopted new „salvation“ economic policies, however, the loss of national wealth caused by the measures to alleviate the crisis made some EU states particularly exposed to negative outcomes for employment and public spending.
    These measures will have to take time to be assessed and implemented in the member states. So far, numerous states experience great after-chock effect when „real banks influence“ on economic development is felt in the beginning of 2010, e.g. in Greece.    
    Main lesson from the financial crisis was that national supervisory structures were insufficient to supervise internationally active banks; hence the need for powers to regulate cross-border banks in line with the European level effective oversight.

    First steps
    After the signs of full-blown crisis swept European states, the EU institutions first reaction was through Councils actions. Member states ministers of economy and finances made some recommendations in October 2008 that their agreed to follow; these recommendations, turned into so-called „common position“, are well worth remembering:
    — Interventions should be timely and the support should in principle be temporary;
    — The member states will be watchful regarding the interests of taxpayers;
    — Existing shareholders should bear the due consequences of the intervention;
    — The governments should be in a position to bring about a change of banks management;
    — The banks and financial institutions management should not retain undue benefits, i.e. governments may have inter alia the power to intervene in remuneration (banks bonus culture can be described as „heads I win, tails you lose“);
    — Legitimate interest of competitors must be protected, in particular through the state aids rules;
    — Negative spill over effects should be avoided.

    Full text at the website of The Baltic Course The EU measures to manage the financial sector: expected effects for banks


    Articles »  The EU measures to manage the financial sector: expected effects for banks »  Views: 4657   Diplomatic Club


    Diplomatic Economic Club



    Home  ::   About Diplomatic Club  ::   DEC news  ::   Cooperation  ::   Publications  ::   Trade Fair Riga  ::   Club archive   ::   Legal  ::   Contact  ::  

    close open

    Diplomatic Club for Peace Appeal to world leaders and humanity

    Diplomatic Economic Club strongly condemns and is not accepting any kind of aggression, military collisions, wars between countries, which are happening here close in the center of Europe, on the other continents of the world, in Asia, in Africa.
    Nothing can justify the use of force in any cases, everywhere it leads to suffering of civilians.
    We call all parts, leaders of all levels for a peaceful solution of any disagreements through the dialog and negotiations.
    Only the Peace on our planet, olny Friendship and mutual understanding promote the life of people.
    Please don't even allow yourself any thought about World War III, about nuclear weapons.
    All the humanity remembers the wars of the 20th century, and if somebody has forgotten, please remember. Diplomatic Club for Peace

    Stop War! Peace All over the World



    Diplomatic Economic Club
    unites members from 37 countries of the world.
    Diplomatic Economic Club is a unique association where people from different countries are to find a common language and contribute to the development of contacts between businessmen of the countries they represent.
    1997 the beginning of the formation of the idea of creating a club, the establishment of internal interactions in the club on the basis of international exhibitions in Riga, periodic meetings.

    Digest

    She phrase Economic Diplomacy assumes the diplomatic official activities that are focused on increasing exports, attracting foreign investment and participating in work of the international economic organisations