Are we still a European force?

[Herr Tubthumper]

The Vickers Report on banking reform made a number of recommendations for new regulations, many of which cannot be legislated for by Parliament. One recommendation was that banks maintain a 10% capital buffer. At the moment this is actually illegal under European law and Parliament cannot pass a Bill to implement it because the matter is covered by EU regulations.

It strikes me as a bit of a stupid report if it is making recommendations which are impossible to be introduced.

In what way does the EU prevent this 10% buffer?

 

[paddy]

In what way does the EU prevent this 10% buffer?

The EU Capital Requirements Directive restricts the buffer to a lower level (using quite a complex formula). Since it is a directive, it has direct effect in English law and supremacy over any other legislation introduced at a national level.

Had Cameron achieved his opt-out on financial services, this area would have reverted back to Parliament.

 

[Chicken Runner61]

Thank you - I'm touched ! You seem to be ignoring that the Eurozone is bankrupt, propped up by only two main economies ( 3 at a stretch if you include The Netherlands ) and wholly artificial. Unless there is complete fiscal union including taxation ( which will NEVER happen ) it's unlikely to survive another decade ( and that's being generous ).

Well done on the "little England" phrase - only phrases missing are "nationalistic", "jingoistic", "Englander" and "right wing" and you would have won the soppy leftie EU bingo game.

Its all very well saying the Eurozone is bankrupt but you do see we are bankrupt as well then If you include all debts not just Sovereign we are 1001% over GDP. If our growth does not happen next year we will have real problems and you taking joy out of Europe going pop will be short lived because it will take our banks with it.

 

[Alex Alex Dawson oo! oo!]

The EU Capital Requirements Directive restricts the buffer to a lower level (using quite a complex formula). Since it is a directive, it has direct effect in English law and supremacy over any other legislation introduced at a national level.

Had Cameron achieved his opt-out on financial services, this area would have reverted back to Parliament.

In the case of EU Directives the member states concerned (the Directive may not concern all) are required to adapt their national laws accordingly but are free to decide how. In the case of the UK, that is usually achieved by primary or secondary national legislation being approved (or not) by Parliament.

 

[beorhthelm]

Whilst we are on the subject of banks this is a list of the banks who get fried if Europe goes bang
It runs from 20 down to the biggest hit!

thats a interesting list, wheres it from? hope the absence of british banks upto 20th is noted.

 

[Herr Tubthumper]

In the case of EU Directives the member states concerned (the Directive may not concern all) are required to adapt their national laws accordingly but are free to decide how. In the case of the UK, that is usually achieved by primary or secondary national legislation being approved (or not) by Parliament.

So what you're saying is that our parliament could introduce this law but at a rate at or above the one set by the EU?

 

[Leekbrookgull]

Read a piece here today on the BBC News web (Europe and all that it means,etc) it stated that France hold over 55% of Greek debt !! If true and i was a Frenchman i would be very worried.

 

[Alex Alex Dawson oo! oo!]

So what you're saying is that our parliament could introduce this law but at a rate at or above the one set by the EU?

Possibly, but I guess that depends on whether the Directive sets a maximum upper limit.
My point is that the UK Parliament had a choice whether to approve the legislation.

 

[paddy]

In the case of EU Directives the member states concerned (the Directive may not concern all) are required to adapt their national laws accordingly but are free to decide how. In the case of the UK, that is usually achieved by primary or secondary national legislation being approved (or not) by Parliament.

True, but it still has direct effect so that if a member state implements it incorrectly (or, for instance, the UK decided to modify it slightly so it allowed a 10% buffer) any individual (in the UK) could take the UK to court (or more likely the Commission). In any event, there is no way out of a directive unless you have an opt out for directives relating to a particular area, like financial regulation.

 

[paddy]

Possibly, but I guess that depends on whether the Directive sets a maximum upper limit.
My point is that the UK Parliament had a choice whether to approve the legislation.

My understanding of the directive is that it includes a particular formula through which the capital buffers are determined. The UK must implement that specific formula (which will result in under 10%) or it will find itself before the ECJ.

 

[Chicken Runner61]

thats a interesting list, wheres it from? hope the absence of british banks upto 20th is noted.

I cant do a link its from a link within a tweet on my ipad.

Simone Foxman Business Insider compiled it Its based on exposure to PIIGS debt. Don't get too comfy I suspect our banks will get fried from the money owed from this list.

My money is on it being Dexia that was the bank rumoured to have been "saved" by the ECB the other week.

 

[Leekbrookgull]

Read a piece here today on the BBC News web (Europe and all that it means,etc) it stated that France hold over 55% of Greek debt !! If true and i was a Frenchman i would be very worried.

Have to amend that France is liable for $56.7b of Greece's debt (total debt off $485bn) made up of private 42b Govt 15b still a worry. Germany has liabiltes off 40b of which 10b are private whilst the German Govt picks up the rest,no wonder the pair are like 'Dogs passing razor blades' !

 

[Chicken Runner61]

Read a piece here today on the BBC News web (Europe and all that it means,etc) it stated that France hold over 55% of Greek debt !! If true and i was a Frenchman i would be very worried.

FFS what is it with you people - If the French banks owe it our SQ Mile or banks probably lent a large proportion of it it to the French Banks! Its like a game of pass the parcel bomb

 

[Chicken Runner61]

Have to amend that France is liable for $56.7b of Greece's debt (total debt off $485bn) made up of private 42b Govt 15b still a worry. Germany has liabiltes off 40b of which 10b are private whilst the German Govt picks up the rest,no wonder the pair are like 'Dogs passing razor blades' !

In April the following countries were as follows

French Banks 20%
Swiss Banks 20%
German Banks 15% close to
USA banks just above 5%
Uk banks about 3%
Netherlands,Portugal about 4%
Ireland Japan italy about 3.8%
spain & sweden about 1%

basically its a european problem 80% were claims on european banks but if this failed the flight to US treasuries will cause yeild sto fall there as aresult of risk aversion. this will widen spreads further on

If the IMF act onb Greece and spain they might not be able to act on other crisis later on - eg here!
There are only an few insurance businesses with potential for contagion risk but they include Mapfre and Fortis
39% of Fortis tangible book value is exposed in greece, 25% in portugal and wait for it........ 69% in Italy
Mapfre has 4bill Euros of exposure to Spanish bonds
Several insurance Giants have substantial positions in each country
Bulgaria & Romania rely on Greek Banks for a large amount of lending which will disappear macedonia & albania will be hit too.

This info is from April - things got worse after that - Still think it won't drag us in to it?

 

[beorhthelm]

Simone Foxman Business Insider compiled it Its based on exposure to PIIGS debt. Don't get too comfy I suspect our banks will get fried from the money owed from this list.

i have no doubt that our banks will be on the hook indirectly. the point is that the list shows its a far wider problem though out countries and banks than those implying that this is all the fault of our banks in the City make out.

FFS what is it with you people - If the French banks owe it our SQ Mile or banks probably lent a large proportion of it it to the French Banks! Its like a game of pass the parcel bomb

so... you are going to be one of those people? there *is* a world of finance outside the City. Where do you think the money comes from? Its Chinese, Brazilian, Saudi, Qatari, Russian, Canadian, South African, Japanese, US, UK, French, German, Italian... everyone from the little old lady with her few grand savings, through the wealthy businessman, the entrepreneur, the rich arab prince, businesses (alot have surplus cash, more currently than any time in history), sovereign wealth funds, pension funds, investment funds. alot of it might be funnled through the City but thats not were it comes from like they have printing machine.

yes, it is a game of pass the parcel, but the parcels are being made all across Europe (and China, US, Japan) with their own money.

 

[Chicken Runner61]

i have no doubt that our banks will be on the hook indirectly. the point is that the list shows its a far wider problem though out countries and banks than those implying that this is all the fault of our banks in the City make out.




so... you are going to be one of those people? there *is* a world of finance outside the City. Where do you think the money comes from? Its Chinese, Brazilian, Saudi, Qatari, Russian, Canadian, South African, Japanese, US, UK, French, German, Italian... everyone from the little old lady with her few grand savings, through the wealthy businessman, the entrepreneur, the rich arab prince, businesses (alot have surplus cash, more currently than any time in history), sovereign wealth funds, pension funds, investment funds. alot of it might be funnled through the City but thats not were it comes from like they have printing machine.

yes, it is a game of pass the parcel, but the parcels are being made all across Europe (and China, US, Japan) with their own money.

I don't get your point of this post.

Isn't half the problem that the worldwide banks have mixed your little old ladies few grand savings in with high risk loans and trading and also pumped printed money (which never really existed) into the system and then engaged in credit swaps, currency wars etc through deregulated exchanges and markets thereby causing the financial crisis in 2008.

I am the one saying if these countries go bust we could be dragged into it via the British banks as our exposure is quite high which seems to have been missed by some on here. Now whilst obviously much of the blame can be placed also with the EU for providing the flawed system that this is based around IMO the deregulated system is the primary cause as it has fuelled the greed and reckless trading and was done so at the detriment to our manufacturing and industrial industries. You have stated yourself that world finances are involved and it is a wider problem that includes us which is my point exactly.

We are getting close to 2008 conditions again - whats your solution to the 2008 crisis and what do you propose to solve the one we may be entering.

 

[beorhthelm]

I don't get your point of this post.

Isn't half the problem that the worldwide banks ...

i think you do get the point but overlook it - this is not just a UK issue. "our" banks are not the root of the problems facing many countries right now. our banks are not at fault because French banks lent heavily to Italy's or Greeces or brought countries bonds without proper due diligence of their budget, nor that Eurozone banks are required to invest in euro denominated bonds where ever they come from (so to grow they need to absorb what ever they can), nor that rating agencies grading is enshrined into regulations concerning which bonds banks must hold for reserve collateral. the riling against deregulation overlooks that there is actually quite alot, its just counter-productive, unenforced, circumvented or doesnt reflect the industries activity (from 2008 the situation is summed up by the tale that the US regulator had a single desktop to model the entire economy. meanwhile the banks had massive server farms each, plus some of the most intellegent maths and physics graduates to make the models)

alas i dont know the solution (wouldnt be on NSC so much if i did), but its not a knee jerk powergrab of regulation and taxation on a business sector that was acting as a facilitator.

 

[Alex Alex Dawson oo! oo!]

My understanding of the directive is that it includes a particular formula through which the capital buffers are determined. The UK must implement that specific formula (which will result in under 10%) or it will find itself before the ECJ.

The EU Internal Market isn't my area of expertise (perhaps if directly related to Healthcare); however I've just spent a "few" minutes searching online and have come up with the following from the updated and re-issued Capital Requirements Directive (2006/48/EC) that was ipublished in June 2006.

Article 75 (Calculation of Requirements - Minimum Level of Own Funds) reads as follows:

"Without prejudice to Article 136, Member States shall require
credit institutions to provide own funds which are at all times
more than or equal to the sum of the following capital
requirements:"

The Directive then goes on to list list various types of risk (eg credit, dilution, foreign exchange, commodity....) with the levels of funds required for each.
However, these are minimum requirements and the Directive clearly gives member states the flexibility to set a level above this if they so wish; hence it's whatever Parliament decided to pass into UK law that's the issue really; eg if the paragraph I've quoted wasn't included then we may have just the minimum levels applied? If so, this doesn't contradict the Directive in any way.

 

[Chicken Runner61]

i think you do get the point but overlook it - this is not just a UK issue. "our" banks are not the root of the problems facing many countries right now. our banks are not at fault because French banks lent heavily to Italy's or Greeces or brought countries bonds without proper due diligence of their budget, nor that Eurozone banks are required to invest in euro denominated bonds where ever they come from (so to grow they need to absorb what ever they can), nor that rating agencies grading is enshrined into regulations concerning which bonds banks must hold for reserve collateral. the riling against deregulation overlooks that there is actually quite alot, its just counter-productive, unenforced, circumvented or doesnt reflect the industries activity (from 2008 the situation is summed up by the tale that the US regulator had a single desktop to model the entire economy. meanwhile the banks had massive server farms each, plus some of the most intellegent maths and physics graduates to make the models)

alas i dont know the solution (wouldnt be on NSC so much if i did), but its not a knee jerk powergrab of regulation and taxation on a business sector that was acting as a facilitator.

Just because I am being realistic about the circumstances doesn't mean I am overlooking anything - I can see exactly what has gone on and the failings of Europe are quite obvious to me. It's a collusion of Both governments and global companies and investors that have created this mostly for personal gain.


I can only assume your position or employment is dependant on "our" banks or financial system. I have no problem with a financial system or a sector that makes profits operating in financial services but you are overlooking the fact that it's the rest of the nation that has paid the price for those faults.

Unless you have a financial gain from the bailout you are pretty stupid not to want to see either some of the money returned and regulation installed to stop it happening again. There are a lot of innocent people out there whose lives are wrecked or going to be wrecked from the failures. The next 10 years are going to be spent with people on low or average wages having to suffer for those bank failings.

According to your economics its unacceptable for governments or the EC to make errors or come up with regulations that and systems that fail economically or otherwise but when private companies or banks fail not only are they bailed out they are allowed to continue to operate the same way.

Funny how some individuals and institutions can foresee the chaos and problems ahead and make millions out of it but others in the same sectors can't?

You are overlooking the fact that some of those individuals and institutions are forcing government policies across the world to create markets that make money from those markets. They know that those fabricated markets have spikes and bubbles that will allow them to make vast sums from the flaws in the systems. They needed deregulation to do this and have done very well out of it.

I can understand you wanting to defend it if its in your interests, it might even be in my interests but what amazes me is the turkeys on here voting for Xmas!

The uk might have missed the departure of the titanic but we employed the iceberg spotters and all our baggage is stored in the hold!

 

[beorhthelm]

[MENTION=18653]chicken runnner61[/MENTION], so you get the global nature, but i see you are still insisting this is part of the 2008 crisis. Greece was over extended regardless of that issue, so were/are Italy, Spain, Portugal, France and the UK if the appetite for debt or appraisal of risk ever changed. well it did, and we've all been found out, as it would have sooner or later regardless of the 2008 events. yes, it about the regulation of the previous ten years. its mostly due to the structure of the Euro is systemically flawed, with fiscal union, no bank of last resort to back the Euro and disregard for the rules they did set. they thought this would never happen (a nation state unable to raise funds, afforably, at will) so didnt put anything in place; even when it did happen they carried on as if somone else was to blame and would fix it for them.