Bankers in Europe 'will face tougher regulation'

6 September 2012

European bankers have been warned to expect tougher supervision in the wake of numerous scandals in their industry in recent times.

Joerg Asmussen, member of the executive board at the European Central Bank (ECB), believes issues such as the Libor manipulation fiasco and lenders' involvement in illegal dealings with Iran offer proof the sector is incapable of policing itself, Reuters reports.

Speaking during a conference of bankers in Frankfurt, Mr Asmussen stated: "The cumulation of misdeeds by individuals at big financial institutions shows that tougher regulations are needed."

The ECB policymaker went on to say it has become obvious that internal controls and external oversight are not working effectively at the moment, adding banks would face "unforeseeable" consequences if Libor-rigging allegations were proven true.

Earlier this week, German finance minister Wolfgang Schaeuble indicated that full ECB supervision of the European banking sector may not be possible.

By Tony Aynsley

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