EU leaders met in Brussels yesterday and continued their discussion today on the British reform proposals, the migration crisis but also on their economic views and Bank Breakups.
Brussels is worried about the prospect of an actual Brexit but relaxed about the outcome of the summit. British Bankers were at pains to dispel the Franco-German view that the U.K. financial sector would use the deal to persuade its regulators to write easier rules. “Our regulators are tough,” said one. “A lot tougher than the European ones.”
In a bleak forecast, the OECD calls for less austerity by opening up the spending spigot. The message from the Organization for Economic Cooperation and Development to world leaders could not have been clearer yesterday. The OECD slashed growth forecasts for all the G7 countries and the world economy. All the more remarkable since its previous predictions were just three months ago. Global growth is now projected at 3 percent in 2016, no faster than in 2015, its slowest pace in five years.
Gunnar Hökmark, the European Parliament’s rapporteur on the controversial plans to separate retail and investment banking, was unmoved by the call for bank breakups issued by the Federal Reserve’s Neel Kashkari. The Swedish Christian Democrat MEP told Politico that the idea was a no-go in Europe: “Let the U.S. deal with the U.S. banks, the Europeans can deal with the European banks,” he said. “The problems in the banking sector are in traditional retail banking, lending money for real estate and to companies.
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