No bank is an island

Photo: Scott Beal Creative Commons

Photo: Scott Beal Creative Commons

In order to avoid future financial crisis with expensive rescue packages, the Commission has presented several proposals regarding modifications of the banking system, the much talked about bank union. Last night, the Council agreed on one part of this – the European bank inspection. The decision on the common bank inspection is welcomed, since it implies that a monitoring mechanism will be put in place with the purpose of detecting problematic banks in time and of preventing lax national bank supervision. Our economies are intertwined and the activity of the banks is becoming more and more transnational, and thus there is a need for a common inspection. The common bank inspection creates stability and trust.

In the financial and economic crisis that Europe is experiencing, the banks have been in focus. The banks ran out of money and required urgent rescue packages. Money has been pumped in as a means of avoiding bankruptcies, which could have resulted in not merely crisis, but complete chaos. Of course we can stare ourselves blind on the countries in which the concerned banks are situated – Spain, Greece and so on – but the fact is that these are all European banks. When these banks have been in crisis it has affected the economy of entire Europe. It is good that Sweden has been actively involved in influencing the shaping of the bank union. Even if Sweden has not introduced the Euro yet, the country’s economy depends on the economy of the rest of Europe. Have we already forgotten that Swedbank was sharply knocked during the Baltic crisis years 2008-2009? I guess not. As a Europhile I note that it is a shame that Sweden, together with the UK and the Czech Republic, choose to remain outside the cooperation.

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