Saturday, 7 September 2013

Sound money for Europe

By Syed Kamall

You can be sure that most of my colleagues in the European Parliament do not embrace the concept of the free market. Day after day, I hear them speaking up for the protection of established interests or attempting to regulate away risk. However, there is one area where there is a genuine coalition of interests and that is the need for banking reform.

Despite all the legislation, nearly six years after the run on Northern Rock and almost five years since Lehman Brothers collapsed, we’ve endured an onslaught of new financial regulations emanating from Brussels, but we haven’t solved the fundamental problem. If a bank went bust tomorrow it would still need taxpayers to bail it out. The Left hate bail outs because they believe taxpayers’ money should be spent elsewhere and not on subsidising what they see as “rich bankers.” While those of us who believe in free and open markets think that companies that fail ought to be allowed to go bust to allow better-run rivals and new entrants to fill the gap in the market. This coincidence of interests has formed the basis of the Left-Right coalition.

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