EBF/BusinessEurope warn against hurried solutions

13 October 2008

Recent bank failures in Europe have exposed the pervasiveness of the turmoil, both institutions note underlining that hurried solutions would be counterproductive and merely lead to increased cost.

Recent bank failures in Europe have exposed the pervasiveness of the turmoil and the extent to which the present confidence crisis affects financial institutions’ access to funding through ordinary market channels, both institutions noted in a joint statement

 

To tackle the most immediate challenges, banks must clean up their balance sheets and communicate their precise financial situation, they underline. Also, the cross-border supervision and crisis management of European banks has to be improved.

 

However, both also warn against an accelerated review of certain regulatory arrangements, including solving conflict of interests in the activities of rating agencies.

 

“Hurried solutions to a rapidly evolving financial situation would be counterproductive, and merely lead to increased cost and reduced choice for issuers and investors”, they state.

 

Statement attached below

 

© EBF