In his latest attack against Europe’s proposed banking union, Borg called the basic structure proposed for a common European banking framework “unreasonable,” arguing that Sweden won’t accept a model that gives euro members more clout than European Union states outside the currency bloc.
“The European Banking Authority, the European Central Bank would automatically get a majority,” Borg said in an interview in Stockholm yesterday. “This entire regulatory framework that we’ve built up in the last few years is based on that when different countries get into a conflict, different banks get into a conflict, there will be mediation. You can’t leave that to an institution where the ECB and the euro countries have an automatic majority.”
Sweden, which wants to impose stricter capital standards on its banks after the industry’s expansion into the Baltic States triggered losses in 2008 and 2009, won’t accept EU rules that hamper those regulatory goals, Borg said.
“We’ve worked hard to raise capital coverage requirements on Swedish banks,” Borg said. “We’re not prepared, through the back door, to allow the French and others who were skeptical of this to undermine that deal and decide that it’s only the ECB that can decide capital coverage requirements.”
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