International

All we get these days are short reports over Europe’s banks. Just as if there’s nothing left to worry about, measures needed to prevent a repeat of the financial crisis of the last few years are being watered down or sometimes not adopted at all. The Europhiles have got their ‘banking union’. Apparently it’s now less important what this banking union does, than the fact of its existence. It’s just as the SP warned. European supervision of banks is not automatically better supervision.

There was a brief report in the Dutch financial newspaper Financieele Dagblad last Friday to the effect that the splitting up of banks is not certain to happen. We should all remind ourselves that there were banks which were ‘too big to fail’ and that they had therefore to be rescued with taxpayers’ money. One of the answers to how this might be avoided in the future was to split the banks into risky sections which would be obliged to stand on their own two feet and sections which would concern themselves exclusively with normal banking activities such as payments, loans and savings. Although the US and the UK have already introduced such measures, the banking lobby in Brussels continues to resist, evidently with some success as the relevant European Commissioner, Britain’s Jonathan Hill, has now announced that he will withdraw his predecessor’s proposal for such a split unless agreement on a text is swiftly achieved. For the Netherlands this is an extremely important measure, because our banks are rather large relative to the size of our economy. If in the future something should go wrong at say ING, then it’s clearly going to cost us money.

Now the banking union was supposed to put our minds at rest, because it would include, for example, the establishment of a fund into which the banks would have to pay, the purpose of which would be to help rescue banks, should they need it. One small problem: the fund is by some distance not big enough to save major banks should there, for instance, be renewed unrest on the financial markets. So rescuing big banks will still be down to all of us.

It’s a shame to see the member states and the European Parliament not making a better fist of things when it comes to tackling irresponsible speculation and the building in of guarantees against fresh dramas in the world of banking. At the same time we’ve lost any grip on our banks as bank supervision has passed to the European Central Bank and out of the hands of our own national bank. From the point of view of the bankers, things are looking pretty good: their rewards are increasing, and there’s no ban on bonuses to put a stop to that. There’s no question of any transformation of culture, but the head of the Eurozone, our own Finance Minister Jeroen Dijsselbloem, is perfectly happy with that. Personally I believe that the banks will soon be front page news once more, not because they will collapse again, but because somewhere in Europe a minister will have the courage to tackle them, a minister who will ensure that in his or her country banks will no longer grow to a size that means that they will eventually have to be rescued by the taxpayer.