Officials in the European Commission are for the first time discussing the
possibility of creating a contingency fund for banks and financial institutions
outside the eurozone.
Under Brussels’ current rescue mechanisms, which include bail-out funds with
€700bn of firepower, banks in non-eurozone countries are not protected.
Officials are discussing the possibility of extending an existing fund that is
currently used as a backstop to help any member state that has a balance of
payments crisis.
Simon O’Connor, a spokesman for the European Commission, said that the ideas
being discussed were about “providing a credible public backstop at the European
level, capable of reassuring supervisors and market participants that financial
stability will be assured”.
According to the Commission, the idea would be to take the existing Balance
of Payment Facility and “within it create an instrument for the financial
sector”. Details are hazy but under the current rules Britain would be liable for 14pc
of the fund - or €7bn. Britain could also be on the hook for any liabilities for
failed banks.
France, Spain and Italy are more likely to support the plan, arguing that the
EU must show investors it is able to deal with any problems that emerge after
bank reviews taking place next year.
"Details are hazy but under the current rules Britain would be liable for
14pc of the fund". And which rules would those be? I hope it wasn't written in the "tidying up
treaty" that was Lisbon?
If it wasn't Lisbon I would love to know what rule it falls under and how the
British population were informed of the risks of signing up to these rules....
or is that too much to ask for in a "democracy". "... Brussels’ current rescue mechanisms, which include bail-out funds with
€700bn of firepower"
What they actually have is nothing. They plan to take some of the €700bn
from Eurozone members (as no Eurozone member is in credit, the EZ member
governments would all have to borrow it from the markets, at market rates). The
chumps at the EC plan to use this cash as a basis on which to borrow a whole
load more money from the markets, at market rates. They would then lend this
money at preferential rates to EZ members who need to bail out their banks.
Now substitute "banks" for "markets" and it becomes apparent that the grand
plan is to borrow a shed load of money from the banks and use that money to bail
out the banks. What could possibly go wrong?
Added to all of this is the dodgy oversight of those who run the scheme, the
lack of oversight/control over how they distribute the €700bn and that they can
choose their own mates to be their auditors.
2 comments:
Equally misguided, according to the consultancy firm's research arm, is the argument that recent declines in prices for a range of commodities – from copper to iron ore and oil – mark the beginning of a downward trend.
In the first edition of its 44-page report entitled Resource Revolution: Tracking global commodities markets, McKinsey makes the case that resources supply has already hit the limits of being able to react to short-term shifts in demand, especially in the case of oil. So often in the past, this has resulted in sharp short-term spikes in prices, which affect most people at the petrol pump. Other than natural gas and renewables, the company warns that new sources of energy and commodity supplies remain hard to tap.
Este important de menționat, în context, că politica dusă de Draghi de a permite cumpărarea nelimitată de acțiuni suverane a funcționat până acum doar în condițiile în care semnalul dat de guvernatorul BCE a fost suficient pentru a calma piețele, nefiind necesar ca instituția de la Frankfurt să angajeze vreo achiziție efectivă de obligațiuni. În condițiile în care datele problemei s-ar schimba, este probabil ca aceasta să genereze o reacție fermă de opoziție din partea Berlinului, care privește cu circumspecție orice tentativă de mutualizare a datoriilor suverane.
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