STOCK MARKET WATCH -- Tuesday, 27 August 2013

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10. Europe’s Single Bank Rule Book Falls Apart as North Races Ahead

http://www.bloomberg.com/news/2013-08-26/europe-s-single-bank-rule-book-falls-apart-as-north-races-ahead.html


The goal of a single rule book for Europe’s banks is splintering even before it’s implemented as northern countries move ahead with tougher requirements to ward off the next boom-to-bust cycle.

Sweden’s too-big-to-fail banks, which already face stricter capital rules than their competitors elsewhere, may be told to hold even larger reserves, Financial Markets Minister Peter Norman said yesterday. In Denmark, Business Minister Henrik Sass Larsen said he can’t wait for southern Europe to regulate its systemically important financial institutions. He backs the swift passage of national capital laws to curb bank risks.

“Getting Sifi regulations in place in a number of southern European countries probably will take time,” Larsen said in an e-mailed reply to questions. “We must signal we are in control of things and thereby strengthen the market’s and customers’ confidence in them.”

As Europe struggles to stimulate growth without stoking a new credit bubble, the specter of swelling private debt is prompting regulators from Sweden to the Netherlands to curb borrowing. The measures go beyond new capital rules approved earlier this year by the European Union and set to become law by Jan. 1.