Europe Issues New Bank Guidelines – BusinessWeek

Europe Issues New Bank Guidelines

zyakaira notes: These common rules specify stress tests for the 30 that have received state aid. Also they emphasize the fact that this aid must stay on the books to be of any value and not immediately used to save falling/defaulted bonds. All in all, it looks good on paper and barring any unforeseen bickering by the nation states individually as BoE and maybe a few others may prefer, these would set a nice denominator. From my side I would recommend that the best and worst case be not used to skew results and be used in a fair range, which should be eminently possible in 6 months


To even out different requirements imposed on banks that have received government aid, the European Commission has set forth common rules

The European Commission laid out new guidelines for banks receiving government support on Thursday (23 July) in order to avoid distortions of competition within the sector.

Since the fall of Lehman Brothers last September, roughly 30 banks within the EU have received state aid to keep them afloat on condition that a restructuring plan be submitted within six months.

But banks will have five years to implement their plans, an indication that the commission still considers the current climate extremely difficult.

Philip Lowe, the commission’s director-general for competition, said the guidelines were “the ultimate stage in restoring health to the banking sector…which is done by returning individual institutions to viability without state aid.”

He cautioned that state aid could not be provided so that banks could continue with a “failed business model.”

Instead, the restructuring plans must take account of “the present state of and future prospects of financial markets, reflecting best-case and worst-case assumptions,” say the guidelines, which will remain in place until 31 December 2010.

via Europe Issues New Bank Guidelines – BusinessWeek.


About zyakaira

Investment Banker, 40s, Bangalore This Biopic and this web recreates how one point of view, one person can impact a tremendous economic engine that the world thrives and mis-thrives on. This one has the knowledge and the civil sense , the art of conversation and some good writing to mentor others as powerful and help global managers develop and fine tune their approach on US markets, China, India and the world. Read on here, and let me know what you need. It can be a race for TRPs, a race for new markets and a race to do what is right. I have the pulse of the crisis, the recovery and the market direction and can help you build and refine your strategy as i have helped thousands of managers and multiple global corporations. Of course, it’s more fun if you talk to me. I am in favor of leading this moving of the economic crisis and will partner with you in a soft and subtle way, just the way we both ride to the top. But you can write with us, opine and just reply with aplomb and shine on Twitter , 4 square , Facebook and any other social “choupal” of choice via zyaadakairaada Profile & Portfolio - SocialPicks Different flavours at:

Posted on July 28, 2009, in Bank Stocks, Financial Markets, Global and tagged , , , , , , . Bookmark the permalink. Leave a comment.

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