Major European economies offered support on Friday for US President Barack Obama’s plan to limit banks’ size and trading activities but indicated they had no plans to follow suit.
Obama’s proposals could rewrite the world financial order but experts said they were light on detail and could cloud the global approach fostered by the G20 countries.
The EU will not imitate Obama’s plan, because it aims to reduce risk in the sector through other means, an EU source said on Friday.
“Look, we understand the US position and we understand his reasons. But I can’t see the EU going down this route,” said the source, who is close to EU financial policymaking.
“The US finds itself a little behind us on this. The Obama plan is not fit for the purpose in the EU,” she said.
Obama made his proposals on Thursday, saying he was ready to fight resistance from Wall Street banks he blamed for helping cause the global financial crisis.
The plan would prevent banks from investing in, owning or sponsoring a hedge fund or private equity fund.
It would set a new limit on banks’ size in relation to the overall financial sector and, perhaps most dramatically, could also bar institutions from proprietary trading operations, which are unrelated to serving customers, for their own profit.
French Economy Minister Christine Lagarde welcomed the proposal, saying it was a “very, very good step forward.”
UK Treasury Minister Paul Myners said Britain already had acted to address problems in its banking industry.
“He’s developing a solution to what he sees as the American issues, we’ve already taken the necessary action in the UK,” Myners said in an interview.
The German finance ministry stressed the need to move forward internationally and said Berlin would present its own proposals on improving banking regulation.
“We see the new proposals as a helpful suggestion for the continuing discussions on an international level. And we’re obviously aiming to find a solution to the problem of the ‘too big to fail’ issue,” ministry spokesman Michael Offer said.
Spanish Deputy Prime Minister Maria Teres Fernandez de la Vega said her country shared Obama’s views about the causes of the crisis but that each country should take its own measures.
The EU source, who declined to be named, said the bloc would focus on raising banks’ capital requirements and tightening financial regulation, pursuing initiatives under way in the European Parliament.
SPEED OF LIGHT: US lawmakers urged the commerce department to examine the national security threats from China’s development of silicon photonics technology US President Joe Biden’s administration on Monday said it is finalizing rules that would limit US investments in artificial intelligence (AI) and other technology sectors in China that could threaten US national security. The rules, which were proposed in June by the US Department of the Treasury, were directed by an executive order signed by Biden in August last year covering three key sectors: semiconductors and microelectronics, quantum information technologies and certain AI systems. The rules are to take effect on Jan. 2 next year and would be overseen by the Treasury’s newly created Office of Global Transactions. The Treasury said the “narrow
SPECULATION: The central bank cut the loan-to-value ratio for mortgages on second homes by 10 percent and denied grace periods to prevent a real-estate bubble The central bank’s board members in September agreed to tighten lending terms to induce a soft landing in the housing market, although some raised doubts that they would achieve the intended effect, the meeting’s minutes released yesterday showed. The central bank on Sept. 18 introduced harsher loan restrictions for mortgages across Taiwan in the hope of curbing housing speculation and hoarding that could create a bubble and threaten the financial system’s stability. Toward the aim, it cut the loan-to-value ratio by 10 percent for second and subsequent home mortgages and denied grace periods for first mortgages if applicants already owned other residential
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list
ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing manufacturing (ATM) service provider, expects to double its leading-edge advanced technology services revenue next year to more than US$1 billion, benefiting from strong demand for artificial intelligence (AI) chips, a company executive said on Thursday. That would be the second year that ASE has doubled its advanced chip packaging and testing technology revenue, following an estimate of more than US$500 million for this year. ASE is one of the major beneficiaries from the AI boom as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is outsourcing production of advanced chip
RSS