European Banking Regulations and Reforms

Extract

[...] By establishing a coverage rate that is too high, the bank becomes a safe deposit box, it no longer reinjects the amount of the sums it collects and puts them out of reach. By applying the golden rule, banking institutions had a very narrow margin to reinject certain amounts. The reinjected money corresponded to approximately 3 to of total deposits. On the other hand, these banks only lent on a short-term basis, as there needed to be a flow. In a certain way, while the banking system had developed among the general population, a retraction was observed. [...]

[...] The the law of 13 June 1941 then takes up again the separation of investment banks and deposit banks. For example, deposit banks can at the time only receive deposits with a term of less than two years. After two years, the retail bank is forced to return the money to its neighbor, where the investment bank can do so in 10 years. After the liberation, in 1945, the government of Général de Gaulle maintains the loi du 13 June 1941. [...]

[...] It was a matter of approaching a more distant vision in terms of financing, particularly in the acquisition of real estate (new constructions, civil engineering, hydroelectric dams . However, many real estate assets had to be built in the bombed cities. It was thus from the sixties that mortgage loans were granted. The real estate projects being sometimes financed over several dozen years, it was necessary to allow banks to have longer resources. In 1982, in the socialist government of François Mitterrand - freshly arrived in power - nationalise all banks. [...]

[...] Banking activity is no doubt the most integrated activity within the European Union, at the point that we are speaking about today of Union banking. In banking matters, the major European principles of freedom of establishment and circulation are absolutely consecrated. The constitution of a European banking establishment, implies the acquisition of a European passport. Banking borders are thus erased. Indeed, the rule laid down by the European Union for a bank to be able to carry out business in the territory of a Member State is as follows: it must obtain the approval of its country of origin. [...]

[...] by granting loans, charging commissions etc. To support his statement, Professor claimed to have participated in an operation at the end of which a British bank sold its 'retail' activity worldwide for 1 euro. This activity therefore produces very little revenue. - Operations for the benefit of the clientèle : Banks perform a brokerage function - they are then referred to as brokers - consisting of executing their clients' stock exchange orders. This is an activity of order transmission or execution. [...]