German Politics - SPD for bank failures without sovereign risk

Former Finance Minister Peer Steinbrück presents today the SPD parliamentary group his plans on the future regulation of the banking sector. Tomorrow I will have potential chancellor candidate of the Social Concept will be introduced to the public.

"We want to protect the taxpayers' money"

Furthermore dedicated Steinbrück concept dealing with the shadow banking sector. According to Schneider wants Steinbrück define clearly what is the shadow banking sector, the financial institutions outsource their risky business. The next step would have the liquidity line between banks and the sector will be capped. "When is such a shadow bank goes bust, then spend the money the speculators away, that's his risk," said Schneider. But it does not fall to bank with, for the taxpayers stand straight. "We want to protect the taxpayers' money."

Shadow banks

Shadow banks are companies performing similar functions, such as banks - but subject to almost no controls. Also exchange traded index funds and private equity firms, finance companies and insurance companies, for example, loans are also granted to consumers. They make similar businesses such as banks, but only partially subject to the rules that apply to traditional financial institutions.

Sales of this parallel system has in 2002 worldwide by 2010 to around 60 billion euros more than doubled. This corresponds to 30 percent of the entire financial system. The EU Commission is concerned that the failure of a shadow banking because of their association with the chartered banks can shake the financial system dangerous.

Banks should pay into fund

Moreover Steinbrück plan a bailout for banks. "If banks are too big pay and go bankrupt, then now is the taxpayers," said Schneider. "We want to go bankrupt that they can." In the Fund will pay the big banks. Such a levy would amount to at Deutsche Bank about two billion euros.

Steinbrueck himself had provided this part of his concept with the slogan banking ESM - according to the new permanent euro bailout fund ESM. The financial needs of such a rescue fund for banks he estimated at 150 to 200 billion euros. It will, however, take several years before the banks had sufficient funds paid into the fund. In Germany there is already a national restructuring fund, which is financed by the bank levy introduced in 2011.

Criticism of the plans came from the Association of German Banks. The ARD television said association CEO Michael Kemmer, IN QUESTION at the concept are "a placebo that does not help anyone." The plans Steinbrück stood against the interests of the German economy.

Really is true that the shadow banking sector needs to be regulated. The idea of ​​a bank rescue fund, as already exists in Germany was correct. Steinbrück's proposed splitting of large banks in investment and lending business, however, he rejected decisively, even if the claim sounded good grip. The pure separating get nothing. So be about the U.S. bank Lehman Brothers, whose bankruptcy had triggered the financial crisis in 2008, was a pure investment bank. "After the defeat of theory Steinbrück they had at that time there just as it has existed." Nevertheless, this failure had triggered the financial crisis or fired massively.