John Redwood’s question to the Prime Minister during the European Council Statement, 17 December

Mr John Redwood (Wokingham) (Con): If we are to have growth in Europe, we need to have banking reform both to recapitalise the banks and to write off the bad loans and assets. Is there any timetable for raising the huge sums that the euro area will need to capitalise its banks, and when is the ECB going to make the Spanish and other weak banks in the system write things down to a realistic level so that we can start to trade away from the disaster?

The Prime Minister: My right hon. Friend asks an important question, which reminds me that I did not answer the former Chancellor’s question about the Spanish banks. There will be opportunities to deal with that, but in the light of the way in which this is being structured, further progress will need to be made under the banking union proposals before the sorting out of Spanish banks can take place. Many in the eurozone would argue that all those delays are damaging to the future of the eurozone. On bank recapitalisation, stress tests have been carried out in Europe, although some people argue about their robustness, but that was not the focus of discussion on this occasion. This was not so much about banking capital as about the process of a banking union.

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2 Comments

  1. Elliot Kane
    Posted December 18, 2012 at 3:25 pm | Permalink

    Ah. ‘The 12th of Never’. A very popular date, unfortunately…

  2. margaret brandreth-j
    Posted December 18, 2012 at 5:11 pm | Permalink

    Again the debate seems to have been about what is to be built on the sand and not about the foundations. Foundations are the essential of any business.If I were starting out in business with a product / skill, I would ensure that enough returns are there to enable me to restructure. As money is the foundation and being the basis of the banking system ,it would seem that capital is the key to allow the freedom for the more fluid types of deals required within the system. The bigger picture is always easier to see than all the inherent maneouvres though and perhaps is too simple for the realities of banking.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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