President of the European Central Bank (ECB) Jean-Claude Trichet has supported a plan by Obama to reduce the size and activities of major banks, writes The Wall Street Journal.
The head of the Central Bank said the euro zone, that such proposals should be coordinated at the international level.
Furthermore, Trichet urged U.S. senators to support the nomination of Ben Bernanke and approve it for a second term as chairman of the Federal Reserve System. Trichet, Bernanke refers to “with great respect.”
As the WSJ, such a move atypical for the head of the ECB, which usually prefers not to interfere in politics.
plans for banking reform, published by the White House last week, “coincide with our own position, namely, the desire to make the banking sector is mostly engaged in” financing the real economy, the ECB president said.
Obama intends to limit the market share of largest finkompany U.S., as well as their trading operations.
the Bank of England Mervyn King said that the U.S. proposals mark a commitment to radical reform. However, it is unrealistic to expect the possibility of establishing a financial structure that will prevent all financial crises in the future, added King. More reasonable would be to ensure the stability of the new financial order: the problems of one sector should not destroy the stability of the remaining segments of the system.
Meanwhile, analysts believe that France and Germany are unlikely to agree to such a reform, because it significantly undermine the position of the largest banks, including Deutsche Bank and BNP Paribas on the international market.
Many financial companies noted normalizatibcbon of activities and forget that the government spent huge sums on their salvation, and central banks have taken unprecedented steps to support finsektora, said Trichet. Therefore necessary new regulations that banks are not able to return to the previous excessively risky practices.
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