Eurozone Banking Reform Approved

Eurozone Banking Reform Approved.

A €55bn deal has been agreed in Brussels today by EU finance ministers to establish rules EU wide with regard to failed banking groups and how this is handled and funded.

The move creates a common framework and core principles not just for capital adequacy test of individual banks but when a banking group gets into difficulty, a core fund to enable the swift movement of capital (an emergency fund) to take over and shore up any ailing bank.

Comment

The move will offer confidence across the global for EU banking financial stability.

In addition, we see this as a first tentative steps to an EU wide banking system – much in the same way as sovereign nation’s banks are able to move funds around, a common EU banking system will enable swift movement and transactions across EU currency nations.

We actually also see this as another very tentative step to wrestle global banking control away from London and New York, the two biggest finance centres.  A target that always been on the horizon for the French and Germans.

Will it affect you and your pound?

No, all non EU currency nations are not party to the agreement.