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interestrateripoff

Eu Banks Face Fines If They Fall Short On Capital

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http://uk.reuters.com/article/2011/07/20/uk-eu-banks-idUKTRE76J22I20110720

Banks in the European Union could face fines of up to 10 percent of turnover if they fail to comply with tougher capital and liquidity rules, the bloc's financial services chief said on Wednesday.

Michel Barnier, the EU's internal market commissioner, unveiled draft laws in Brussels to implement the new global Basel III accord, which will force 8,200 banks in the EU to hold more and better quality capital over six years from 2013 in a bid to shield taxpayers in a future financial crisis.

Banks will have to raise 460 billion euros of extra capital to fully comply by the start of 2019, which Barnier said would hit economic growth by 0.1 percent for every 1 percent increase in capital and cut the risk of a big banking crisis by 70 percent.

"This will have a fundamental impact on the activities and behaviour of European banks. It's a highway code that applies to all," Barnier told a news conference.

The draft measures largely mirror Basel III, which was approved by leaders of the top 20 economies (G20) last November such as a minimum core equity capital ratio equivalent to 7 percent of a bank's riskier assets.

But it goes further in some cases by introducing tougher sanctions, ways to dilute the influence of credit ratings, and improvements to corporate governance, such as requiring boards to consider more female members and introduce whistle-blowing programmes.

Some interesting ideas here, although clearly they are sticking the knife into the credit agencies who are no longer wanting to play ball with the farce of rating crap as AAA.

Rather than fining the bank 10% surely the bank should be denied the ability to make any profit or pay bonuses until the capital requirements have been met.

It more smells of them trying to increase revenues.

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How does this work? The bank does not have enough cash. So the government authorities fine them. Now they have even less. Perhaps they will go bust! Quick, bail them out with government money...

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How does this work? The bank does not have enough cash. So the government authorities fine them. Now they have even less. Perhaps they will go bust! Quick, bail them out with government money...

Your clearly having a bit of a logic fail here...... :ph34r::ph34r::P

Edited by interestrateripoff

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Fine them an exponentially increasing percentage of their shares, with those shares having a special clause making them un-dilutable.

And ban bonuses and halve management salaries.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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