News Column

Banking Greens accuse Brussels of giving in to big banks

July 7, 2014

Green MEPs have accused Brussels of capitulating to demands from leading banks that want to cut the cost of their contribution to an EU safety net at the expense of building societies and other mutual financial institutions.

According to the MEPs, a backroom deal will allow banks to calculate their contribution to the European rescue fund based on their balance sheet rather than on a scheme that gauges the level of risk banks take.

The effect will be to force large building societies and mutuals to make contributions under the new European Banking Union rules while cutting the costs faced by banks involved in casino-style trading.

Molly Scott Cato, South West Green MEP and finance spokeswoman, said the parliament had agreed a scheme that would assess the risks posed by each bank and charge an annual fee for a Europe-wide bank insurance scheme.

"But in a sleight of hand this clear intention of lawmakers is about to be disregarded in the fine print," she said.

It is possible the new arrangements will force building societies and credit unions to pay into the rescue fund despite maintaining a low-risk profile. Scott Cato said: "Current plans do not dig deep enough. They would see building societies bailing out Barclays and its ilk." Phillip Inman

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Source: Guardian (UK)

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