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European banks face tough dislosure rules

EU member states say that the disclosure rules are unworkable.

The European Parliament is pressing for tough disclosure rules for banks and limitations on bankers’ bonuses as part of the law implementing the Basel III international accord.

Under the proposal, banks would face the threat of revealing their profits and taxes in every country they operate apart from disclosing their bookkeeping practices.

Although the proposal has backing of the European Commission, majority the EU member states, however, are opposing the initiative.

Meanwhile, negotiations broke down on Tuesday over issues of bonuses and the disclosure rules. Fresh discussions will be held next week.

Ireland, which holds the EU presidency, floated options including raising the maximum bonus ratio to 3:1 or partially exempting bail-in bonds, which are written down when a bank fails.

Expressing its willingness to open discussions on technical details including the role of shareholders, the European parliament insisted on a 1:1 cap, which can be increased to 2:1 with shareholder approval.

Philippe Lamberts, a Green member of the European Parliament (MEP), described a tentative offer of a future review to see whether the transparency rules should apply to banks as “an insult to lawmakers and citizens”.

Sharon Bowles, the chair of the parliamentary committee involved, said the disclosure rules were quite modest for an industry at the heart of the economy. “If the council can’t support them then they have something to hide,” Bowles said.

MEPs argue that the transparency requirements for banks are in line with the French, German and British demands that were made at a G20 meeting in Moscow.

Michel Barnier, the EU commissioner responsible for the reforms, said: “I fully support the European parliament in wanting to impose transparency requirements for banks by country, for taxes paid, profits and state aid received.”

The move follows a negative report by the Organisation for Economic Co-operation and Development (OECD) that revealed how the multinational US companies like Starbucks, Apple and Amazon have either avoided or reduced tax.

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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.