Saturday, May 18, 2013

Almost Zero Tolerance: Germans Crack Down on Financial Markets

Germany has introduced some 30 laws regulating the financial market, the most important of which were passed this week. The government claimed they are milestones, but they don't go far enough for the opposition.

The German parliament's order of business this week was full of bewildering abbreviations: CRD IV, Basel III, AIFM, SSM-regulation. But behind the letters lies a new, stricter regulation of the financial markets, or what Christian Democratic Union parliamentarian and finance policy specialist Hans Michelbach called a "new constitution for banks."

The debates and votes were spread over two days, at the end of which the parliament passed laws on stricter equity regulations, bank "testimonies" (a yearly report in which a bank lays out how it will act in the event of insolvency), penalties for bank executive boards, and the segregation of high-risk financial business from everyday banking activities…….

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