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‘Lessons have not been learned’ - Jill Evans MEP wants stronger banking sector reforms

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Plaid Cymru MEP Jill Evans has pledged to fight for stronger reforms to the banking sector in Europe to protect ordinary savers from high-risk trading practices.

The MEP said an EU Commission proposal on structural reform to the banking sector was an 'historic missed opportunity' and that the lessons of recent years had not been learned.

The proposal has attracted widespread criticism for failing to fully separate day to day banking from higher risk investment activities.

Since early in the financial crisis, Plaid Cymru has been calling for EU measures to regulate the banking sector, including limits on banker bonuses and stronger regulation of banking practices. Jill Evans MEP predicted that banking reform would be one of the key challenges for the next term of the European Parliament following European elections in May.

Jill Evans MEP said:

"It is ordinary taxpayers across Europe that have footed the bill for banking bailouts caused by greed and largely unregulated speculation and risk-taking. This cannot be allowed to happen again.

"We have to get to grips with reforming the banking sector, and this latest European Commission proposal fails to do that.

"Plaid Cymru is calling for full separation of retail and investment banking activities. We need a clear line drawn between the day to day business of saving and lending and the much more risky retail banking.

"The European Commission has left it so late to bring forward this proposal that it will be impossible to legislate on it before the European elections.

"That's why banking reform, and doing away with the culture of greed and speculation, will be a top priority for Plaid Cymru in Europe over the next five years."

Jill Evans MEP said also that stricter regulation on capping banker's bonuses may be needed after the UK government was accused of trying to get around the rules on the cap on excessive bonuses.

The cap, which sets strict limits on annual bonuses to banking executives, was first pushed through the European Parliament by Plaid Cymru's parliamentary group.

Now it has been suggested that certain banks in state ownership may be trying to get around the rules. The cap on banker bonuses championed by Plaid limits the annual bonus to the equivalent of annual salary.

This can be increased to a maximum of double annual salary under the EU rules but only with shareholder approval. Since, as in the case of RBS for example, the government is the majority shareholder following the bailout, they effectively have a veto over the 'double bonus'. The UK government is already challenging the legality of the bonus cap in the courts.

Jill Evans MEP, who represents the whole of Wales in the European Parliament, said:

"We fought hard for a cap on excessive banker bonuses.

"Many of our largest banks owe their survival to being bailed out with taxpayers’ money and it is unacceptable to my constituents that these massive sums of money are still being paid.

"If it becomes clear that these measures to cap banker bonuses are not adequate, we will push for stronger legislation."

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