Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Economy
In reply to the discussion: STOCK MARKET WATCH - Tuesday, 19 June 2012 [View all]Demeter
(85,373 posts)10. Worried EU Banks Resist Fiscal Union
http://www.nytimes.com/2012/06/18/business/global/worried-banks-pose-threat-to-push-for-financial-union.html?hpw
The seemingly endless series of euro zone crises has European officials pushing for a banking union that would watch over and bind together the currency groups faltering financial institutions. But for Europeans, there seems to be little appetite for such a compact right now. In fact, banks and their national regulators, anxious about the Greek elections and Spains hastily arranged bailout, are behaving more parochially than ever. That poses a threat to the interbank lending across borders that is crucial to maintaining liquidity the free flow of money that is the lifeblood of the global financial system. French and German banks have clamped off much of the lending to their counterparts in Italy and Spain, which in turn are primarily giving loans to their own debt-laden governments. And in Madrid, even after European finance ministers agreed to a 100 billion euro, or $125 billion, rescue of Spains failing banks, the always proud Spanish government is insisting that it and not Brussels bureaucrats will take charge of how and where the funds are deployed...
...Mario Draghi, the head of the European Central Bank in Frankfurt right now the closest thing the euro zone has to a banking coordinator said Friday that he and top European Union officials in Brussels would present a master plan for the euro project in a matter of days. A blueprint is only that, however. Substantial changes that would affect banks and national budgets would probably require treaty changes and voter approval. That process could take many months and there is no guarantee of success. As part of the push, the European Commission published proposals this month that would include creation of a Europe-wide banking supervisor whose oversight powers would trump those of local regulators. And to discourage the flight of bank deposits from weaker countries, a problem that has plagued Greece and now Spain, the European Commission proposed a deposit insurance fund for the entire euro zone, analogous to the Federal Deposit Insurance Corporation in the United States. Individual euro zone member nations already have deposit insurance. But the Spanish fund, for one, is nearly insolvent. Under the Brussels proposal, a new banking regulator would also have the authority to share the financial pain of bank bailouts by forcing some holders of the bonds of bailed-out banks to absorb losses....
The seemingly endless series of euro zone crises has European officials pushing for a banking union that would watch over and bind together the currency groups faltering financial institutions. But for Europeans, there seems to be little appetite for such a compact right now. In fact, banks and their national regulators, anxious about the Greek elections and Spains hastily arranged bailout, are behaving more parochially than ever. That poses a threat to the interbank lending across borders that is crucial to maintaining liquidity the free flow of money that is the lifeblood of the global financial system. French and German banks have clamped off much of the lending to their counterparts in Italy and Spain, which in turn are primarily giving loans to their own debt-laden governments. And in Madrid, even after European finance ministers agreed to a 100 billion euro, or $125 billion, rescue of Spains failing banks, the always proud Spanish government is insisting that it and not Brussels bureaucrats will take charge of how and where the funds are deployed...
Why do you think European banks wont lend to Spanish banks? asked Karel Lannoo, chief executive of the Brussels-based Center for European Policy Studies and an expert on bank regulation in Europe. Because they do not trust Spanish regulators. Has Citigroup stopped lending to California? No. What we need is a single banking supervisor and a single settlement system like in the United States. And we have no time to lose.
...Mario Draghi, the head of the European Central Bank in Frankfurt right now the closest thing the euro zone has to a banking coordinator said Friday that he and top European Union officials in Brussels would present a master plan for the euro project in a matter of days. A blueprint is only that, however. Substantial changes that would affect banks and national budgets would probably require treaty changes and voter approval. That process could take many months and there is no guarantee of success. As part of the push, the European Commission published proposals this month that would include creation of a Europe-wide banking supervisor whose oversight powers would trump those of local regulators. And to discourage the flight of bank deposits from weaker countries, a problem that has plagued Greece and now Spain, the European Commission proposed a deposit insurance fund for the entire euro zone, analogous to the Federal Deposit Insurance Corporation in the United States. Individual euro zone member nations already have deposit insurance. But the Spanish fund, for one, is nearly insolvent. Under the Brussels proposal, a new banking regulator would also have the authority to share the financial pain of bank bailouts by forcing some holders of the bonds of bailed-out banks to absorb losses....
Edit history
Please sign in to view edit histories.
50 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
RecommendedHighlight replies with 5 or more recommendations
Will DOJ Investigate if JP Morgan Used LCH.Clearnet As Front to Tank MF Global, Take Customer Money?
Demeter
Jun 2012
#6
Spain Sells 1 Year Bills At Record Post-Euro Yield, ING Says Spain To Need €250 Billion More; German
Roland99
Jun 2012
#16
Hang on, let me check... Yup, word/concept still in dictionary. So why does nobody want to use it?
Ghost Dog
Jun 2012
#28
Europe Launches Ban On All Policy Criticism By Scrapping Use Of Rating Agencies
Roland99
Jun 2012
#30
LADIES, IF THE SHOE FITS: On being an alpha female OFF-TOPIC? MAYBE; OFF-COLOR...
Demeter
Jun 2012
#41
Does the Judge in Your Foreclosure Case Own Stock in the Bank Foreclosing on You?
Demeter
Jun 2012
#47