Dr György Suranyi argues for a new Stability Pact to focus on external accounts and widen the narrowly interpreted fiscal rules.
The euro is a success – despite its governing framework, the Maastricht Treaty and Stability and Growth Pact. Reforming the treaty and pact involves enormous political and economic risks. But not reforming them is even riskier.

Delta Banka, Serbia’s second largest bank by assets, has been acquired by Banca Intesa, Italy’s biggest bank. The deal will see Intesa acquire either 75% plus one share or, under certain circumstances, 100% of the voting share capital of Delta Banka. It is expected to close early in the second quarter of 2005 subject to approval by the regulatory authorities in each country.

Reaction to President George W Bush’s latest budget proposals – which were presented to Congress on February 7 – has been mixed, writes Jane Monahan in Washington.

A lawsuit filed earlier this month against Bank of America raises the issue of who is responsible for online fraud. A Miami businessman, suing to recover $90,000 allegedly stolen from his account and placed in Latvian-based Parex Bank, has brought the case.

The remorseless rise in regulation is seen as the main risk facing banks, according to the latest ‘Banana Skins’ survey from the London think tank CSFI. Regulation was described by many of the 440 bankers and observers from 54 countries surveyed as ‘out of control’ and ‘a serious threat’.

BNP Paribas has acquired 50% of TEB Financial Investments AS from Turkey’s Colakoglu Group for $216.8m. The sales agreement, signed in Istanbul on February 11, means that the French bank now has control of a 42.2% stake in Türk Ekonomi Bankas¦ (TEB), a midsize Turkish bank. The development came as European banks stepped up a campaign to buy shares in Turkish banks, ahead of the start of Turkey’s membership talks with the EU in October.

Stephen Roach worries about how the US economy can exit low real interest rates sensitively.

If banks do not respond to the changes in their environment, they could find themselves going the way of the dinosaur .

European banks are sizing up potential acquisition targets in Turkey as the country’s financial sector benefits from the prospect of EU membership.