EU: finance unions hope that the new European banking supervisory authority will help change practices in the sector

Profit.  Last week, the European Commission proposed a regulation providing for the supervision of all banking undertakings in the eurozone by the European Central Bank (ECB).  The first step toward banking unity is going to let the ECB authorize credit establishments, enforce existing obligations on capital stock or debt, and control financial conglomerates. It will have a wide range of prerogatives. It can notably investigate and dismiss the consent given by board members and impose fines.  Philip Jennings, general secretary of the UNI Global international service union federation told Planet Labor the 12th, “It s huge, the world of European banking will never be the same after this. We welcome this step forwards. Some 4 years after the financial crisis riped - October is the Lehman Brothers date - we now have a new proposal for the financial supervision of the European system which we did not have before.”  Two reports published by the federation earlier this month point to the slides of a system where the search for unrealistic profit has gone on corrupting the financial system and working conditions for banking employees.  “There, we look at what is the key benchmark banks make for themselves. It is the rate of return on equity. They are setting for themselves a rate of return of 15% and it has a number of consequences: first on investments, which usually get cut if you want to make this rate of return, then in the real economy the European business is starved of capital, thirdly it provokes risks in financial speculation to make a quick buck, and fourthly you have to issue job losses by cutting labor over head.”