03 September 2013

Handelsblatt: Merkel plans to tackle shadow banks

Translated from the German

Merkel called for stricter global rules for so-called shadow banks and warned of an embarrassment for the top economies (G20) in parliemant on Tuesday: "If we do not achieve appealing and relevant results in this matter, then the G20 will look ridiculous and ineffective. There are again tendencies to delay decisions, but Germany will act decisively. I want us to adopt a binding timetable to make clear when we reach each individual step." 

In 2008, the G20 had agreed that any financial market actor and any financial product and financial centre would have to be regulated. This Thursday and Friday, the G20 leaders convene in St. Petersburg for the eighth summit. 

Merkel also expects advances in the fight against tax evasion: "We will agree with the strongest economies that there should be an automatic exchange of information", she said. The G20 would probably also accept and implement the proposals made by the developed countries organisation OECD to combat tax avoidance. The goal was that multinational corporations could no longer find loopholes to rules that enabled them to avoid paying taxes anywhere in the end. 

Shadow banking institutions are institutions that are not banks but still do award loans, such as hedge funds, private equity or money market funds. From 2002 to 2011 their balance sheet total has more than doubled to $67 trillion, according to the FSB.

Full article (in German)
Further reporting (in German)

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