{"id":27286,"date":"2017-10-26T06:49:27","date_gmt":"2017-10-26T11:49:27","guid":{"rendered":"http:\/\/olduvai.ca\/?p=27286"},"modified":"2017-10-26T06:49:27","modified_gmt":"2017-10-26T11:49:27","slug":"the-eu-just-did-the-big-banks-a-massive-favor","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=27286","title":{"rendered":"The EU Just Did the Big Banks a Massive Favor"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2017\/10\/25\/the-eu-just-did-the-big-banks-a-massive-favor\/\">The EU Just Did the Big Banks a Massive Favor<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>\u201cTestimony to the iron grip the financial industry\u2019s lobby still exerts on governments and legislators.\u201d<\/strong><\/p>\n<p>The European Union\u2019s executive arm, the European Commission, made a lot of bank executives very happy this Tuesday by <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2017-10-24\/eu-buries-its-plans-to-split-up-retail-and-investment-banking\">abandoning<\/a> its multi-year pledge to break-up too-big-to-fail lenders. Despite the huge risk they still pose to Europe\u2019s rickety financial system, big European banks like Deutsche Bank, BNP Paribas, ING, and Santander can breathe a large sigh of relief this week in the knowledge that they will not have to split their retail units from their riskier investment banking arms.<\/p>\n<p>Breaking up the banks would remove much of the risk from today\u2019s government-backed banks, such as derivatives and other instruments that were heavily involved in the Financial Crisis. Without these hedge-fund and investment-banking activities, even large banks would be smaller, less interconnected, and could be allowed to fail without jeopardizing the entire global financial system.<\/p>\n<p>According to the Commission, such a drastic measure is no longer necessary since the main rationale behind ring-fencing core banking services from investment banking divisions \u2014 i.e. to make Europe\u2019s financial system less disaster prone \u2014 has \u201calready been addressed by other regulatory measures in the banking sector.\u201d That\u2019s right: Europe\u2019s banking system is already safe, stable and secure. <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2017-10-24\/eu-buries-its-plans-to-split-up-retail-and-investment-banking\">Bloomberg<\/a>:<\/p>\n<blockquote><p>The proposal, which hasn\u2019t progressed since 2015, was made to boost financial stability and safeguard taxpayers from the risk of future bailouts. While the commission and the conservative lead lawmaker on the file said this goal had been achieved by other laws on supervision and resolution, the socialist lawmakers backing the \u201cBank Structural Reform\u201d bill disagreed.<\/p>\n<p>\u201cThe too-big-to-fail financial behemoths still pose a danger to financial stability, to the taxpayer and to clients,\u201d German Social Democrat Jakob von Weizsaecker said in a statement. \u201cThe withdrawal of the BSR file marks an unfortunate turning point in the European agenda on regulating large banks.\u201d<\/p><\/blockquote>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The EU Just Did the Big Banks a Massive Favor \u201cTestimony to the iron grip the financial industry\u2019s lobby still exerts on governments and legislators.\u201d The European Union\u2019s executive arm, the European Commission, made a lot of bank executives very happy this Tuesday by abandoning its multi-year pledge to break-up too-big-to-fail lenders. Despite the huge [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[63,5660,279,2535,284,4255],"class_list":["post-27286","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banks","tag-don-quijones","tag-eu","tag-european-commission","tag-european-union","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27286","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=27286"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27286\/revisions"}],"predecessor-version":[{"id":27287,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27286\/revisions\/27287"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=27286"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=27286"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=27286"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}