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Germany Unites On Financial Market Stabilization Bill

by Ulrika Lomas, LawAndTax-News.com, Brussels

21 December 2011


The German cabinet has recently adopted a new piece of legislation on financial market stabilisation.

Commenting on the latest decision, the finance ministry explains that the legislation aims to implement a European Council decision that imposes higher capital requirements on banks temporarily as of June 30, 2012, and calls on member states to provide support if banks are unable to tap the markets for the full amount of capital required.

The ministry notes that the Council further stated that liquidity guarantees would have to be provided to safeguard the banks’ stability and avoid excessive deleveraging of their balance sheets.

The finance ministry says in its release: “To implement these European decisions in Germany, amendments to national banking legislation will be necessary and the country’s financial market stabilisation fund Soffin will have to be reactivated. Soffin has not been able to accept any new requests for stabilisation measures since January 1, 2011.”

“The new financial market stabilisation bill also includes some adjustments based on the lessons learned in the past”, the ministry adds.

The bill is now due to be submitted to parliament.

TAGS: investment | law | banking | legislation | Germany

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