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Europe's banks need better monitoring, report says

brussels bureau

Europe's banks need better monitoring, report says


The financial sector’s biggest beasts are once again in the spotlight, amid fears many could go under if Greece were to default. Now a new report by a Brussels-based thinktank is adding to calls for tougher monitoring rules to protect the tax payer from the banking industries’ most risky players.

Rym Ayadi from the Centre for European Policy Studies said: “In my view, I would not try to push other business models to follow the business model of retail banks. They would need to somehow recapitalise. Our recommendation shows that we need to monitor the industry to see when the problem occurs.“

Europe’s retail banking sector was given a clean bill of health in the CEPS report.

However, many are also adding their voice for urgent recapitalisation of the financial industry, just as happened in the banking crisis in 2008.

Carsten Brezski, senior economist at the ING bank, said: “The recipe that comes out of this analysis will definitely not solve the current crisis. In the banking system, I think really it is more recapitalisaton of banks which is needed.”

‘‘European politicians really need to give guidance. Firstly, to clearly rule out a Greek exit, and the next thing be how to save Greece even if it might include some kind of debt restructuring,“ he added.

But as euronews’ Fariba Mavaddat says: ‘‘Europe doesn’t seem to have months, let alone years, to sort out its debt crisis. There appears to be a growing consensus we’re only weeks away from the worst and that leaders need to distinguish what has to be done now and what can be left for later.’‘

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brussels bureau