Local view for "http://purl.org/linkedpolitics/eu/plenary/2007-09-05-Speech-3-188"
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"en.20070905.21.3-188"2
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"Mr President, Commissioner, ladies and gentlemen, the crisis demands that I highlight three points.
First, it comes from a hardship crisis among North American national officials. It should be understood that all US officials have very serious deficits, described by what we call the US twin deficits. We have had this crisis, we will have others, either from large US companies, US states or even perhaps from the Federal Government. We should expect some more very serious crises to come from the United States over the coming years.
Second, this crisis happened in the United States in March. It spread throughout the world through hedge funds, the first two of which failed in June. It only affected European banks in late July, early August. We did have time to realise that the flames were spreading. Mrs Merkel, our President-in-Office at the time of the G8, told us to take measures concerning hedge funds, and nobody listened to her. Worse still, the Netherlands are in the process of developing a policy to deregulate the establishment of hedge funds within the country. At the same time as it is speaking against hedge funds, the European Union is encouraging their development in its own territory. This shows a genuine failure of attempts by the European Union to impose supervisory measures and prudential rules upon itself.
As a former rapporteur in favour of prudential rules and supervision of financial conglomerates, I experience this as a personal failure. I recall that we needed more than one parliamentary term to write the simplified prospectus on issuing securities in Europe. Today, one bank is not capable of reading the complex prospectus that another bank publishes on the content of the funds it is selling. That is what it has come to.
The third problem, as I told the Central Bank years ago, is that you cannot regulate the monetary system solely with measures aimed at the lending rate. I think the crisis in Europe was precipitated by the increase in the European Central Bank’s interest rate at the end of the last quarter. I do not think it is enough to say you should reduce the rate by 0.5% or keep the same rate or increase it by 0.5%. We have a genuine problem to sort out, which is the reintroduction of a selective policy for lending, so that the interest rate can be set at 0% for necessary investments such as fighting climate change and can be much more expensive for lending directed at speculation."@en1
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