Europe's banks set for years of 'shrinkage': Borg
Published: 2 Feb 12 09:40 CET | Print version
Online: http://www.thelocal.se/38872/20120202/
Europe's financial sector is set for a decade of reform that will result in a much smaller but more socially useful industry, Swedish finance minister Anders Borg said Wednesday.
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In his lecture in the Latvian capital, Borg said bank owners should be in no doubt about their responsibilities to society as well as their balance sheets.
"Bank owners should know that if they mismanage their bank it will be taken over and their capital will be wiped out," he said.
"We've seen a banking sector with too much risk, too little capital, too weak owners, too weak management that has created excessive leverage, excessive risk taking, and had profit margins that cannot be sustained in future.
"It is a business that will be changing, where the balance sheets will be cut down. This is probably one of the sectors of the European economy that will employ fewer people in the future than they have done. There has been an excessive financial sector that I think cannot be defended in terms of economic fundamentals," he said.
Europe has made progress in restoring its financial credibility, but more remains to be done, Borg added.
"The whole banking sector is going through an overhaul that will go on for a decade," he said.
"We have already set in place much tougher regulations, supervision in most countries is strengthened and we are starting to create a European supervision structure that is very important -- even if we should probably have gone two, three or even five steps further when it comes to strengthening European institutions in this regard."
External link: Slides accompanying Borg's speech »
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That´s great. Go tell that to Merkel, and while you´re at it, stop by at Draghi´s office and force him to stop rescuing german banks.