Euro MPs call for fundamental shake up of banks structures

Arlene McCarthy Labour MEP

In a key vote in the European Parliament's Economic and Monetary Affairs Committee today, Euro MPs backed fundamental change to the structure of EU banks.

Vice Chair of the Economic and Monetary Affairs Committee, Labour Euro MP Arlene McCarthy and the Parliament's draftswoman on the report said: "Today's vote is a clear message in favour of structural reform of the EU banking sector, by ensuring that banking services that are essential to the real economy are separated from the excessively risky activities of traders and investment bankers.”

"My report identifies key reform principles ensuring depositors and consumers no longer pay for the excessive risks taken by banks with their money."

"People must be able to access their bank accounts and make payments even when banks fail. In the case of Cyprus, if the essential services had already been separated before the Cypriot banks failed, then depositors would have had access to their bank accounts and essential payment systems would have continued.”

"Real reform must ultimately ensure that the costs of risky trading are not borne by retail customers and depositors. When banks are booking high profits and paying out bonuses they should not benefit from implicit guarantees or subsidies or tax payer bailouts.”

"According to Commission estimates the financial crisis cost EU governments around 1.6 trillion Euros, which represents 13% of EU GDP in state aid, through bailouts of the financial sector.”

"Ultimately when bankers behave badly they should be personally held to account to ensure they pay for actions that have cost the public dear."

Arlene added: "Today's vote gives a green light and a strong mandate to the European Commission to come forward with a legislative proposal introducing structural reform across all 27 EU member states in September.”