Merkel pleads for unity on regulation
By Geir Moulson |
May 21, 2010, Friday
|
Print Edition
Print Edition
GERMAN Chancellor Angela Merkel has urged the world's economic powers to send a "signal of strength" on tougher financial regulation, arguing yesterday that people are impatient to see change after paying billions to bail out banks.
Merkel has stepped up calls for tighter regulation of the financial sector as Germany and its European Union partners push through a huge eurozone rescue package - something that is unpopular at home. Politicians argue that the markets' behavior worsened the continent's debt crisis.
The German leader recalled that at the height of the global financial crisis that struck in 2008 powers in the Group of 20 rich and developing nations agreed "every product, every actor and every financial center must be regulated - we promised people that."
"Now, after one and a half or two years, people are saying: what came of that?" she said. "At some point we have to provide the proof and say, 'come here, we've done it.' This point shouldn't be too far away.
"My appeal is: let us send a common signal of strength at the G20 summit," being held in Canada next month, Merkel said at a conference on regulation.
In response to the global economic crisis, the G20 - which combines traditional leading industrial nations with rising powers such as China and India - has been designated the key forum for economic coordination among countries.
In Europe, leaders have shown an increased resolve to regulate amid the debt crisis. On Tuesday, EU governments overrode British objections and United States worries to tighten rules for hedge funds, and Germany's securities regulator unilaterally announced curbs on traders of government debt and bank stocks.
Germany earlier this year announced plans for a levy on banks, which would pay into a fund to cover the costs of future financial crises. Merkel this week has advocated some form of financial market taxation, perhaps on transactions.
Merkel urged countries that have been unenthusiastic about tighter rules to recognize the need for them. She said the process needs to move forward, "otherwise - at least this is the case in Germany - people will despair of us."
Canada, Australia and Japan have argued that their banks didn't suffer massive failures and therefore shouldn't have to bear the burden of new taxes.
With European and even US backing for the idea of a bank levy, "if there are again three countries that say, 'but we're not affected by that,' then that's extremely frustrating and ultimately can't move us forward," Merkel told the conference.
Merkel has stepped up calls for tighter regulation of the financial sector as Germany and its European Union partners push through a huge eurozone rescue package - something that is unpopular at home. Politicians argue that the markets' behavior worsened the continent's debt crisis.
The German leader recalled that at the height of the global financial crisis that struck in 2008 powers in the Group of 20 rich and developing nations agreed "every product, every actor and every financial center must be regulated - we promised people that."
"Now, after one and a half or two years, people are saying: what came of that?" she said. "At some point we have to provide the proof and say, 'come here, we've done it.' This point shouldn't be too far away.
"My appeal is: let us send a common signal of strength at the G20 summit," being held in Canada next month, Merkel said at a conference on regulation.
In response to the global economic crisis, the G20 - which combines traditional leading industrial nations with rising powers such as China and India - has been designated the key forum for economic coordination among countries.
In Europe, leaders have shown an increased resolve to regulate amid the debt crisis. On Tuesday, EU governments overrode British objections and United States worries to tighten rules for hedge funds, and Germany's securities regulator unilaterally announced curbs on traders of government debt and bank stocks.
Germany earlier this year announced plans for a levy on banks, which would pay into a fund to cover the costs of future financial crises. Merkel this week has advocated some form of financial market taxation, perhaps on transactions.
Merkel urged countries that have been unenthusiastic about tighter rules to recognize the need for them. She said the process needs to move forward, "otherwise - at least this is the case in Germany - people will despair of us."
Canada, Australia and Japan have argued that their banks didn't suffer massive failures and therefore shouldn't have to bear the burden of new taxes.
With European and even US backing for the idea of a bank levy, "if there are again three countries that say, 'but we're not affected by that,' then that's extremely frustrating and ultimately can't move us forward," Merkel told the conference.
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