Kroes: Commission turns attention to UK banks
02 July 2009
"UK banks need to apply business models that reduce systemic risk", Kroes said commenting on the high state support for UK banks. The City should engage in a dialogue about a change in the business culture.
Commissioner Kroes criticised the high state support for UK banks during the crises. It must be guaranteed that UK banks are viable without state support and non-aided banks are not punished because of aid given, she underlined.
"The massive aid received by banks such as Lloyds and RBS allows these banks to remain leaders on markets which are concentrated”, Kroes criticized. That also means that banks need to apply business models that reduce systemic risk. “We will be working with the UK Government to achieve this”, Kroes said.
So far some 27 banks have received rescue or recapitalisation aid in Europe. “To entertain the idea that we don’t need a market referee, or that we don’t need the single market: that is crazy”, Kroes underlined. Self-regulation didn’t work, Kroes said stating that the key elements of new regulation must involve greater transparency and better supervision.
The Commissioner called on the City to engage in a dialogue about a change in the business culture. “If it does not play a part in shaping this more responsible culture, it will miss out”, Kroes warned. “The UK needs to be part of the mainstream response and needs to address fundamental cultural issues”, she underlined.
© European Commission
