Real banking reforms go further

The government confirmed its intention to finish a new banking law by the end of the year. The structural reform that prevents infections and cross subsidizing in banking groups by dividing the risks into compartments is essential. That’s the only way to make a crucial distinction between the protection of savings and the settlement of other activities without tax money during the settlement of failing activities. Banks are still too big to be saved. If we take the damage into account caused by the average banking crisis and the degree to which the frequency of it can be reduced to higher capital buffers, the capital buffers must at least amount to 20 %. That is twice as high as the new Basel III-norms that has to be reached against 2019. Let’s not make the same mistakes as a country like Japan where a real reorganization of the banking system never took place because of the paralyzing of the economy.