News EuROPE

New banking rules agreed by Eurozone

New rules for the supervision of banks have been agreed by Eurozone finance ministers.

The rules will mean that the European Central Bank will be responsible for overseeing the activities of approximately 200 of the biggest players – banks with over €30bn in assets - in the European banking sector.

The rules are being hailed as a milestone in the journey towards boosting the Euro, and a move closer towards a union of all European banks.

According to the BBC, EU Commissioner Michel Barnier, said: “Piece by piece, brick by brick, the banking union will be built on this first fundamental step today."

HSBC fined record amount for ‘stunning failures of oversight’

Global bank accused of failing to prevent money laundering

U.S. prosecutors have said that HSBC is guilty of a ‘blatant failure’ to prevent money laundering, and as such allowed hundreds of thousands of dollars to be daily deposited into the bank by Mexican drug traffickers.

As a result, the bank has been

fined a record amount of $1.9billion and the bank’s chief executive, Stuart Gulliver, has apologised saying he was ‘profoundly sorry’ for the lack of control. According to The Guardian, he said: “We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again.”

According to The Guardian,

assistant attorney general Lanny Breuer told a New York press conference that ‘HSBC is being held accountable for stunning failures of oversight – and worse, that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries and to facilitate hundreds of millions more in transactions with sanctioned countries’.

Canadian Central Bank governor given top Bank of England role

Mark Carney, the governor of the Canadian central bank has been named as the person to take over the same role for the Bank of England next year.

Carney comes from a country whose banking system was virtually unscathed during the financial crisis and has been acclaimed as a positive choice for the Bank of England.

He will serve for five years and will hold new regulatory powers over banks, starting his new role in June 2013 when the current governor, Sir Mervyn King, relinquishes his role.

According to the BBC, Sir Mervyn has said that Mr Carney represents ‘a new generation of leadership for the Bank of England, and is an outstanding choice to succeed me’.

Chancellor George Osborne echoed his positive sentiments, telling Parliament that Carney’s appointment would bring the ‘strong leadership and external experience the Bank needs’.

The UK and other countries marred by the financial crisis could do worse than look to Canada for inspiration; the World Economic Forum ranked Canadian banks as the soundest in the world, with many authorities on the subject citing the strong and robust regulatory system surrounding the financial sector as the reason why.

According to the BBC, Carney has commented that he is ‘honoured to accept this important and demanding role’ at a ‘critical time for the British, European and global economies’.

LIBOR: Three arrested

Three British men have been arrested in connection with the LIBOR manipulation investigation.

The three men, aged 33, 41 and 47, have been taken to a London police station for interview, and search warrants have been executed at three residential premises, one in Surrey and two in Essex.

It is thought that one of the men is a banker and the other two have had professional dealings with an

inter-dealer broker, according to the BBC.

These are the first arrests since the US Commodity Futures Trading Commission first began looking into possible LIBOR rigging, which led the Serious Fraud Office (SFO) to officially announce in July that it was launching a criminal

investigation into inter-bank lending rate fixing.

Just prior to that, in June, Barclays bank was ordered to pay a fine of £290m for making attempts at rate rigging.