A Page for the History Books: Brussels Pushes Forward with EU Banking Union

[sysop]

On Wednesday, European Commission President José Manuel Barroso is expected to unveil his plans for a unified banking supervisory system led by the European Central Bank. It is intended to break a vicious cycle of crisis-shaken banks and bailouts. But the plan is facing some resistance from Germany.

http://www.spiegel.de/international/...855165,00.html

[kavadias]

The target of a deposit guaranty fund, would be to perpetuate the ability of banks to make loans w/o supervision and regulation. This is a way for bank business to have no risk! This approach of having nations to pay for bank's insolvency, is what has brought European countries in today's critical situation. Spreading the costs to all taxpayers in Europe, does not justify risk-less banking and victimization of taxpayers!

Based on a system of evaluation of *all* banks, the authorities should force banks that fall bellow some rating to deleverage (not recapitalize!), up to full reserves in the limit. If extreme risks are taken they should be payed with the banks' money and not based on blowing up the money supply, creating systemic risks!

The "banking union" approach is a mistake and taxpayers will pay for it. The only thing that should be based on collaboration is the evaluation of banks. This is the only area where a union of evaluation authorities makes sense and is actually required.

To the degree that the banks are not made accountable for their risks, collective responsibility will need to be taken, and a unified european deposit guaranty fund will be required, where national deposit guaranty funds could do the job, allowing for differentiation of country banking sector, based on whether banks are taxed to fuel the national deposit guaranty fund.

All that provide indications that European authorities are heavily influenced by the banking establishment, and will not solve the problematic cycle of bank-insolvency and country-lending to the benefit of the people, but in favor of larger bank profits... Consumer attitude does not answer to such political misdirection. Only the approach of conscious citizens can bring the real issues back to the center of the political agenda.