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ECONOMICS – FINANCE – WORLD NEWS – GREEK DEBT

Spanish PM in money-laundering scandal; UK to take bold step on banking reform

All drama takes place in Spain today, where the opposition is pressing for Rajoy’s resignation. Over the weekend, the Spanish paper El Pais, showed that members of Rajoy’s People’s Party party received money through ex-treasurer Luis Barcenas, who is currently under investigation for money-launderingread article

The UK is seeing a renaissance of the Glass-Steagall act, as the banking reform moves on ringfencing investment banking from commercial banking. Last week, the EU quietly distanced itself from its own, union-wide ringfencing plan, presumably as part of a deal on the financial transaction tax. As for the UK, Alphaville explains:

The Banking Reform bill to be published today will give the Treasury and the bank regulator the power to break up a bank that doesn’t respect the ringfence between retail banking and the riskier stuff.

Whoa! That’s a pretty bold move, not to mention confusing as hell. First, the UK doesn’t want any of the EU’s regulatory “wisdom” (fair enough) to protect the City and Britain’s fantastic economy, and then, it adopts regulations that are much stricter than those on the continent. A+ for consistency (that is not a credit ranking). According to Credit Suisse, the reform could have a negative impact on Britain’s annual GDP worth 0.04-0.1%.

In Germany, the reform of the financial services sector has become a fixed part of the election campaigns, making reform inevitable. Now the question is just how sensible new policies could be.

Meanwhile over in AsiaChina is having a great day, with retail, banking, construction and transport [composing the non-manufacturing PMI] showing signs of recoveryread article

Yet, not all the grass in greener on the other side. China’s central bank has issued a warning to the Bank of China, which has exceeded its loan quota by more than CNY30bn ($4.8bn). “Loans are capped at 75% of deposits under China’s current Commerical Bank Law.

Have a good week.

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2 Responses

  1. […] Houses with No MoneyBANK AMNESTY AGAIN: Leaving Consumers to Fend (Litigate) for ThemselvesSpanish PM in money-laundering scandal; UK to take bold step on banking reform WAU_tab('nzqkl24xd7wo', 'left-middle') .recentcomments a{display:inline !important;padding:0 […]

  2. […] Spanish PM in money-laundering scandal; UK to take bold… (Death Star Economics) […]

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