When global banking regulators met in secret in a London conference room to try to clinch a deal on capital rules, European industry lobbyists were nowhere in sight. They didn’t have to be.
European Union officials at the meeting in December doubled down on their call to soften rules pushed by the U.S., concerned they would penalize the bloc’s banks and cripple lending to the economy — arguments big banks had repeated for months. The talks collapsed, and with them perhaps regulators’ best chance to stiffen global standards to police banks.
Donald Trump’s vow to tear up U.S. regulations imposed after the 2008 crash has already made reaching an agreement more difficult, and only stands to increase the resolve among industry leaders in Frankfurt, Paris and London to resist more regulation. The result: banks could end up with more freedom to repeat the mistakes of the past.
“When the next thunderstorm hits the financial market, they will be left without an umbrella,” Sven Giegold, a German member of the European Parliament who advocates greater oversight of lenders. “Unfortunately, the banking lobby has succeeded in linking weak economic growth with banking regulation.”
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