Local view for "http://purl.org/linkedpolitics/eu/plenary/2009-04-22-Speech-3-029"
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"en.20090422.4.3-029"2
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".
Madam President, a global financial crisis is shaking the world economy and proposals for how to prevent it happening again are now coming thick and fast. More regulation and more supervision are the ‘in’ things. Of course, the starting point must nevertheless be to ask ourselves what went wrong. Allow me to summarise the causes in 50 seconds.
We have an ownerless capitalism. The finance companies are run by officials who can design systems which give them gigantic bonuses and pensions when profits rise. Profits can be increased in the short term by the management raising the risk level in the companies by means of lower equity. When the risks become reality, the management have got their money and the losses are borne by others.
There is no incentive for those who could change these policies to do so. People depositing money in banks know that there are deposit guarantees. Everyone knows that most banks are too big to be allowed to go bankrupt. They will be saved by taxpayers. Rating agencies know that they will not get the work if they question the solvency of their clients. The policy that is pursued by central banks and finance ministries is based on the idea that bubbles must not be burst. They therefore grow unreasonably large.
Are we discussing solutions to these problems? No, we are not!"@en1
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