Wednesday, January 7, 2009
Friday, October 17, 2008
G8 to Meet on Global Bank Reforms
The heads of the G8 major industrialised nations have agreed to hold a summit with emerging states to reform the world's banking system in the face of the global credit crisis.
The US, UK, France, Italy, Germany, Canada, Japan and Russia said that co-ordinated reforms had to be made to the "regulatory and institutional regimes for the world's financial sectors to remedy deficiencies exposed by the current crisis".
Wednesday's joint statement said:
"We look forward to a leaders' meeting with key countries at an appropriate time in the near future to adopt an agenda for reforms to meet the challenges of the 21st century."
Gordon Brown, the British prime minister, who was attending a two-day summit of European Union (EU) leaders in Brussels, said the global summit could be held as soon as November.
Brown said the summit should involve the United States, European nations and emerging economies such as China and India.
He said the summit would discuss increased international financial regulation and would also aim to relaunch stalled global trade talks.
Nicolas Sarkozy, the French president, who was chairing the talks in Brussels, also announced that all 27 EU leaders had agreed to back a plan to shore up the banking sector agreed to on Sunday by Britain and the 15 countries that use the Euro.
The measures include increasing a guarantee on European bank deposits to $136,760 to be implemented within the next 12 months.
International regulation
Ahead of the G8 statement, Brown had called for such a meeting to discuss reform of the international financial system, including the Washington-based International Monetary Fund (IMF).
Brown said: "I believe there is scope for agreement in the next few days that we will have an international meeting to take common action... for very large and very radical changes."
The prime minister said an overhaul of global financial bodies like the IMF and the creation of better rules governing financial markets were "urgently needed so that we can restore confidence" in the global financial system.
He said: "The IMF has got to be rebuilt as fit for purpose for the modern world. We need an early warning system for the world economy."
Brown said creating a new international financial architecture should be "an immediate task" to restore confidence in markets.
He said he wants a group of supervisors from major nations to monitor the world's 30 largest financial institutions.
"We now have global financial markets but what we do not have is anything other than national and regional regulation and supervision," Brown said.
Saturday, October 4, 2008
UK banks say Irish plan distorts competition
UK banks are seeking talks with the Government about its plan to guarantee bank deposits, saying the proposals will distort competition.
“The guarantee has clear consequences for firms competing to win retail deposits," the British Bankers' Association said in an e-mailed statement last night.
Banks, particularly those in Northern Ireland, will be hurt by the Irish plan, the BBA claimed.
“While we support proposals aimed at reintroducing stability to the financial markets, we need fair play for financial institutions across Europe.”
This has “distorted competition,” the statement added. Ireland's move comes as British banks have restricted lending to one another, causing a seizure in money markets and triggering the biggest downturn in the British housing market in at least 25 years.
British bank customers may also be lured to Irish banks by the guarantee, analysts said. The UK's deposit protection plan covers a maximum of £35,000.
“We can borrow more cheaply now because we have the benefit of an Irish government guarantee,” Denis Casey, chief executive officer of Irish Life & Permanent, told RTE radio yesterday morning.
The Dail passed the emergency bank legislation early this morning following an overnight debate and it is now before the Seanad. The Seanad will vote at around noon for the President to sign the Bill into law.
The law will apply to six Irish-owned lenders.
Royal Bank of Scotland Group, the UK's second-biggest bank, said it was lobbying for the inclusion of its Ulster Bank Ireland and First Active units under the Irish plan.
The Irish plan is open to British and other EU citizens, who can open accounts at branches of Irish banks in London and elsewhere.
UK raises guarantee on saving deposits
Britain's financial regulator said Friday it would raise its compensation limit for bank deposits to 50,000 pounds (US$88,500) per customer from 35,000 pounds (US$62,000) and indicated more protection may be coming, as it moved to assuage consumer concern about the global credit crisis.
The change announced by the Financial Services Authority, which comes into force on Tuesday, speeds up a promise from Prime Minister Gordon Brown that the limit would be raised. The move comes after the Irish government this week offered an unlimited guarantee on deposits at its domestically owned banks.
Banks and other savings institutions had reported that nervous British savers were flocking to Irish banks to take advantage of that offer, which the British Bankers' Association said was unfair competition.
The British government earlier this week nationalized its second bank this year, putting struggling mortgage lender Bradford & Bingley under its protective umbrella along with Northern Rock. B&B's savings business, including its entire retail branch network, was sold to Spain's Banco Santander, which also owns Britain's Abbey.
Hector Sants, the chief executive officer of the Financial Services Authority, said that the change to the British rules was aimed at "providing clarity" to savers after the extensive public debate about compensation levels.
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