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BRUSSELS: Britain and Sweden, backed by eastern European allies,squared off with Germany, France and other EU states Wednesday overrules to harden the defences of banks against any crisis. European Union finance ministers gathered for a special meeting inBrussels to debate the so-called Basel III regulation that willrequire banks to increase their capital buffers so they canwithstand financial shocks. The discussion comes in the midst of concerns about the health ofthe Spanish banking sector, still reeling from a real estate bubblethat burst in 2008, but officials say Madrid's struggles are not onthe agenda. "We feel that it is very important that we have strong banks, andthat means strong capital in the banks, so we are looking for asolution today," Swedish Finance Minister Anders Borg said onarrival for the talks. "Either we have strong banks or the taxpayers take the risk, and Iprefer to have strong capital in the banks than to take risks withthe taxpayers," he said, adding that EU states were still "a littlebit away" from a compromise. Britain, Sweden and others want the freedom to impose toughercapital requirements on their banks than the Basel rules, shouldthey want to do so, but the Franco-German bloc is pushing for all27 EU states to follow the same line. "The British want ... the possibility to impose tougherrequirements on a national level. But we have to take care that wehave standardised rules," said German Finance Minister WolfgangSchaueble. The Franco-German bloc fears that allowing one nation to set higherthreshholds would spark a "race to the top," as governments wouldcompete to show their banks have the biggest reserves, said asenior EU diplomat. While the European Commission and nations such as France want"maximum harmonisation," another EU diplomat said Britain arguesthat capital rules are a sovereign issue since taxpayers would beaffected by any bank failures. Polish Finance Minister Jacek Rostowski pointed to the "sadexample" of Ireland, which was bailed out after its public deficitblew up following a banking crisis. "A group of countries including Poland, the Czech republic, Swedenand the UK are very determined to see that banking systems in thefuture should be kept as healthy as we expect the fiscal side,budgetary side, to be kept," he said "This crisis is a crisis in which fiscal and banking system crisisfeed on each other. It's not enough to deal with one, you need todeal with both at the same time," Rostowski said. The two blocs are also at odds over whether banks should be allowedto count capital from their insurance businesses in order to meetthe Basel capital requirements. "This type of capital is not viable," an EU diplomat said, addingthat the Germans "want to cover up the fact they are undercapitalised." The Basel III rules, which governments must start to implement in2013, require all banks to strengthen their capital reserves byraising total core reserves to 7.0 per cent from 2.0 per cent atthe moment. The Danish presidency to the EU has proposed a compromise thatwould allow governments to impose an extra 3.0 per cent buffer,with anything above that requiring European Commission permission. But Britain and Sweden are against letting the commission, the EU'sexecutive arm, making such decisions. London wants the council of EU governments or the European SystemicRisk Board, a financial oversight body, to have a say instead. France, Germany and others concerned that forcing banks to park toomuch capital would curb efforts to encourage them to invest inEurope's sickly economy, the senior diplomat said. - AFP/wm. I am an expert from LASERSDIODE.com, while we provides the quality product, such as China LASERS DIODE , Q- switch Nd yag laser Manufacturer, Diode laser for hair removal,and more.
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