As
IMF
Praises and
Turns from
Iceland, Cites
Basel, Calls
Hungary
Anti-Bank
By
Matthew
Russell Lee
UNITED
NATIONS,
April 12 --
Has Iceland
turned the
corner away
from
financial
meltdown? The
International
Monetary Fund
seems to think
so. On
Thursday the
IMF released
three reviews
of the country
and
held an
embargoed
conference
call for the
press hosted
by Julie
Kozack,
tellingly her
last as IMF
Mission Chief
to Iceland.
She will
be moving on
to Lithuania
and Poland.
The
IMF has
praised
Iceland's
write-down of
debts, while criticizing
Hungary's
restructuring,
complaining
that "all
losses from
the implied
debt reduction
would be borne
by the banks
alone."
As
previously
noted by Inner
City Press,
the IMF
likes bank
mergers.
Last April,
IMF European
Department
Director
Antonio Borges
told reporters
on Friday that
Belgium was
smart to have
pushed Fortis
to being
acquired by
BNP Paribas.
He urged more
such mergers.
Inner City
Press asked
Borges if the
IMF proposed
any safeguards
at all, given
that concerns
exist that
when a local
bank is
acquired by
one based far
away, there
will be less
reinvestment
and
accountability.
Borges, while
calling this
an
“interesting
question,”
bragged that
the IMF
organized a
coordinated
effort to get
large banks to
treat
communities,
particularly
in Emerging
Europe,
fairly, and
that this had
worked
And so it
seems, the IMF
likes bank
mergers. In
Iceland this
is footnoted,
that
"data for
Landsbankinn
and
Islandsbanki
reflect the
impact of
their
respective
mergers with
Sp Kef. and
Byr in the
second half of
2011."
Only
yesterday,
the
IMF minimized
the rushed
licensing of
nine new banks
by political
insiders in
Bangladesh on
the eve of its
program with
that country,
saying that at
least they'll
be subject to
new rules.
Regarding
bank
regulation in
Iceland, the
IMF says
"A
strong,
intrusive, and
independent
supervisory
agency is
essential to
help avoid the
build-up of
risks that can
lead to
crisis...
additional
examiners with
credit risk
expertise may
be needed in
the
onsite
inspection
area and the
credit risk
bureau may
need more
resources to
become a
powerful
supervisory
tool. Staff
underscored
that
preserving the
FME’s
independence,
and its
capacity and
willingness to
act, is
essential to
ensure that
the needed
strengthening
of supervision
continues,
toward full
compliance
with
Basel Core
Principles."
But
what of bank
regulation in
countries like
the United
States, UK,
France and
Germany? Watch
this site.
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