EU's tough love is working for banks
Pierre Briançon
European leaders should pay tribute to the
last commissioner working in Brussels. Competition watchdog Neelie
Kroes is the only member of the European Commission still at her desk,
after she was given a two-month extension till the end of the year to
finish inquiries into government-funded bank aid. She’s making good use
of the extra time. For all the Brussels-bashing of recent years, Kroes
is also doing a service to member states, which originally weren’t keen
on maintaining even basic competition rules at the peak of the crisis.
Banks
have been getting a dose of tough love. Kroes exerted her authority by
forcing a faster and more radical restructuring of the Dutch ING, which
is splitting banking and insurance. She’s also reshaping British
banking from big – Royal Bank of Scotland – to small – Northern Rock.
The UK landscape for years to come will bear the mark of her insistence
that consumers not be forgotten under the pretext of financial
emergency.
Kroes was right at the onset when she decided that
any ruling on bank bailouts should distinguish good aid from bad. The
former was needed to help sound banks weather a crisis they didn’t
cause. The latter was public money used to help provide a lifeline to
those that would have otherwise gone under, or skew competition in
favour of larger survivors.
The commissioner’s efforts were
understandably unpopular – with financial institutions and national
authorities alike. But governments relented over time. They came to
understand the EU could help keep a reeling banking sector from
shrinking into an oligopoly. There may be some disagreement about the
details of the carving, but no mistaking the force and precision of the
knife.
Kroes would like to keep her job in the new Commission, which is to start from January. She should.
Breaking Views
Final Bell
Coercive forces grip India...
Special Reports
The Troubled Asset Relief Programme has been a bigger success than was expected – but its critics haven't gone away...
Risk Encyclopedia
Also in this section
- New Zealand's 'Madoff' jailed for $13m fraud
- Malaysia plans new economic model for growth
- IMF: Tanzania has room for infrastructure funds
- Madoff family seeks dismissal of cases
- Australia welcomes China report into Chinalco de
- Schaeuble calls for closer Eurozone integration
- US bailout watchdog criticises Treasury over GMAC
- Chinese bankers told to curb pay to rein in risks
- Aer Lingus full-year operating loss quadruples
- US senators wrestle with Fed bank oversight issues
Most read articles
World Finance TV
Virtual Edition
In our latest print edition: Gruma's Chairman Roberto Gonzalez Barrera shares his experiences in growing and maintaining his business, and branching out into global markets.
