Local view for "http://purl.org/linkedpolitics/eu/plenary/2013-04-16-Speech-2-019-000"
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"en.20130416.4.2-019-000"2
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"Mr President, the banking industry is ever more global and it requires global regulation. I have supported moves towards the global standard and towards a more level playing field. In the committee vote a year ago, a number of changes were made to try to align EU legislation with global standards. However, many of these were given up during negotiations and, as a result, we have a package which is not compliant with Basel in a number of areas.
My own group wanted to make sure not only that banks are strengthened but also that taxpayers’ money is protected. In particular, we believe it is important that losses are borne by equity holders and subordinated debtors before pain is shared with senior debtors, depositors or the state. The Cyprus situation shows how critical this is, and a key amendment, to us, was the ability for regulators to write down or convert junior tiers of capital or subordinated debt prior to any taxpayer-funded bailout. That amendment has been dropped from the text since the committee vote in May last year.
The legislation does not provide for a level playing field in the single market either. In particular, the bank assurance model is a very material divergence from the global standard. Strengthening banks’ balance sheets must be done in a way that does not strangle investment in the wider economy. It has been very good to work at length with colleagues from across this Parliament to secure safeguards to support SMEs, trade finance and corporates hedging business risks, as well as to recognise the special status for building societies and protect mortgage holders who run into temporary difficulties. I have fought through many hours of negotiations to protect national powers. The ability for Member States to introduce their own higher standards is sometimes vital, and the UK’s ability to implement a ring fence must not be lost.
On the issue of bankers’ remuneration, we know that remuneration packages can increase risk-taking dramatically and do need global regulation. Indeed, I have supported measures to bring a remuneration package that is more long-dated and risk-sensitive, but the bonus cap is a blunt tool which can result in being front-loaded. It sets a bad investment precedent. This legislation makes many moves towards a global standard. My group will not vote against."@en1
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