GlassSteagallfan
28th June 2013, 16:24
June 28, 2013 • 8:48AM
We told you so: Now it is official — the EU finance ministers agreed Wednesday on the Commission's Guideline for Bank resolution, i.e., a general implementation of what was used first in Cyprus. It has to be negotiated with the European Parliament now. The terminology is the so-called "liability cascade," which, in case of bankruptcy of systemically relevant banks, shareholders, bondholders, creditors, and depositors have to pay. Of course, the headlines under which this is sold is, that now the taxpayers don't have to pay any more!
21870
Beyond Cyprus: In Europe, The Banks Rob You!German Finance Minister Wolfgang Schäuble had the gall to say that this agreement for normal investors and savers is "a more theoretical exercise, but for the stability of the financial system it is an important step." "And then: "We have the deposit insurance, on which everybody, not only in Germany, but in Europe, can rely"! Apart from the blatant lying in the face of a completely bankrupt financial system, it has to be noted that the reform of that deposit insurance is another point on the EU agenda! It is acknowledged in the press, that this is the Cyprus model now generalized.
What is not acknowledged is that the EU decision puts the EU in sync with the other major financial power with a bail-in policy, the U.S. under Dodd-Frank.
And it is an important step toward implementing the Banking Union, for which all important elements were to be put on the table by the end of June. Already decided is the ECB role for bank supervision. The French insisted on complete inclusion of the ESM for the bail-out.
Another point, which is played up big, is that now banks have to pay into national resolution funds. However, the EU Commission next week will present a law, which integrates those banking resolution funds into a sort of European Fund, in which, for example, German savings and loans have to be liable for a huge French bank in trouble. Germany nominally is against it, but in light of all of the other steps, this might be swept aside as well, covered with some legalistic formulations.
Source (http://larouchepac.com/node/27146)
We told you so: Now it is official — the EU finance ministers agreed Wednesday on the Commission's Guideline for Bank resolution, i.e., a general implementation of what was used first in Cyprus. It has to be negotiated with the European Parliament now. The terminology is the so-called "liability cascade," which, in case of bankruptcy of systemically relevant banks, shareholders, bondholders, creditors, and depositors have to pay. Of course, the headlines under which this is sold is, that now the taxpayers don't have to pay any more!
21870
Beyond Cyprus: In Europe, The Banks Rob You!German Finance Minister Wolfgang Schäuble had the gall to say that this agreement for normal investors and savers is "a more theoretical exercise, but for the stability of the financial system it is an important step." "And then: "We have the deposit insurance, on which everybody, not only in Germany, but in Europe, can rely"! Apart from the blatant lying in the face of a completely bankrupt financial system, it has to be noted that the reform of that deposit insurance is another point on the EU agenda! It is acknowledged in the press, that this is the Cyprus model now generalized.
What is not acknowledged is that the EU decision puts the EU in sync with the other major financial power with a bail-in policy, the U.S. under Dodd-Frank.
And it is an important step toward implementing the Banking Union, for which all important elements were to be put on the table by the end of June. Already decided is the ECB role for bank supervision. The French insisted on complete inclusion of the ESM for the bail-out.
Another point, which is played up big, is that now banks have to pay into national resolution funds. However, the EU Commission next week will present a law, which integrates those banking resolution funds into a sort of European Fund, in which, for example, German savings and loans have to be liable for a huge French bank in trouble. Germany nominally is against it, but in light of all of the other steps, this might be swept aside as well, covered with some legalistic formulations.
Source (http://larouchepac.com/node/27146)