Too European To Fail? New E.U. Banking Safety Net Takes Shape

Creation of euro-zone supervisor for banks is a breakthrough, but agreement contains some big (and small) loopholes

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Yves Herman/Reuters

European Union leaders pose for a family photo during a E.U. summit in Brussels December 13, 2012. European governments reached a landmark deal on Thursday that gives the European Central Bank new powers to supervise banks, boosting confidence in the single currency bloc as it enters the fourth year of its debt crisis.

The agreement by E.U. leaders to establish a pan-European supervisory system for banks is an important political breakthrough in the drive to shore up the euro-zone’s financial stability, and by European standards it was reached relatively quickly — just seven months after the idea was first put on the table.

Starting in March 2014, the European Central Bank will begin directly supervising all banks in the euro-zone with assets above 30 billion euros ($40 billion), which in practice means about 80% of them. The aim is to provide a far more rigorous oversight for the European banking system than the patchwork of national regulators who are at times prone to domestic political influence. Indeed, the financial crisis in 2007 has exposed the extent to which banking regulation is highly politicized in countries including Spain, where the woes of a handful of savings and loans have plunged the entire nation into crisis and led to the ouster of the head of the central bank.

But, as so often in the E.U., it took laborious compromise to arrive at a deal. That means the supervision will not cover a swathe of smaller banks within the 17-nation eurozone, including Germany’s “Sparkassen”, which are regional savings and loans institutions that have been particularly weak. (The IMF took a useful look at German banking here). Countries that don’t participate in the euro have the choice of whether they want their banks to be covered by the new supervision; so far, Britain and Sweden have declined the offer. That could pose significant problems to the workings of the new system, given the size of British banks and London’s role as the euro’s most important financial center.

(MOREEurope’s Crisis Measures Are Working…Sort Of)

The British will continue to have an important influence on banking regulation issues through a European banking authority in which it has a major voice, and which is expected to work closely with the new supervisory mechanism.

As it is, Europe’s weakly capitalized banks are a central preoccupation for many economists and policy makers: the Organisation of Economic Cooperation and Development estimated this month that euro area banks alone need to raise an additional $500 billion if they are to bring their core capital up to 5% of their total assets, a baseline level. Moreover, with the financial crisis, the relationship between government borrowing and banking has become muddied: Spain again is a good example because the government’s intervention to save its banks has driven up its sovereign borrowing requirement, spooking markets and increasing pressure on the banks, who themselves are holders of an important part of the sovereign debt. In a recent speech, ECB president Mario Draghi said that a financial union was vital to end what he and other bankers are calling this “adverse feedback loop.”

Draghi had argued that supervision of all euro-zone banks should fall within the remit of the new system, saying, “one lesson of the financial crisis is that not only large cross-border banking conglomerates have the capacity to destabilize the financial system. Due to interlinkages and mechanisms of contagion, even smaller institutions may turn out to be systemically important.”

(MORE: What Mario Monti’s Exit Tells Us About Europe’s Debt Crisis)

Still, the deal is better than no deal, which was a very real possibility given some important differences between France and Germany. The French had wanted a comprehensive accord to take effect more quickly; Germany was insistent on exempting its savings and loans, and looked to be dragging its feet on the whole arrangement before Chancellor Angela Merkel and her finance minister Wolfgang Schäuble finally signed. The upshot is that, even though the ECB won’t directly supervise the smaller banks, it will have some powers to push national regulators to step in. Nicolas Véron, an economist at the Peterson Institute, said the agreement amounted to “a big European success.”

Even with this decision, the safety net for European banks remains far from complete, and two other important decisions need to be taken for it to become a reality. The first is the establishment of a resolution mechanism that would enable the new supervisor working with national regulators to deal with failing banks, including by shunting soured loans into a new structure where they would eventually be sold off. The second is the creation of a pan-European deposit insurance scheme that would protect investors up to a certain amount. Such schemes, similar to the Federal Deposit Insurance Corp., already exist in many European nations, but there is no trans-national scheme.

At their meeting last week, E.U. leaders agreed to tackle these two issues in the first half of 2013. So far, the appetite to set up a new deposit insurance scheme looks highly limited, given that governments across the continent are looking to cut back on spending and liabilities. But an accord on resolution may now be on the cards, as the ECB gears up – and staffs up – to become the continent’s bank watchdog.

MORE: Is the E.U. Nearing a Landmark Banking Deal?

2 comments
JackLoach
JackLoach

Sods ----- Law.

March.---- 2015.


For almost two decades we have strived to get justice for the injustice we have suffered at the hands of a world renowned bank--- PICTET & CIE. BANK.


Two yorkshiremen both running their own small family businesses trying to resolve the problem by taking all the correct legal procedures to recover their monies.


The matter was raised in Parliament – twice-- the FSA investigated the matter concluding that PICTET had rogues operating in their London Bank --- but the rogues had left ---saying no one left to prosecute.??? ----- so there.


We then approached the Financial Ombudsman Service. (FOS) --- our case was dealt with by seven different people ---- then our numerous E-Mails were ignored --- nobody would speak to us -------so there.


We then asked the SFO ( Serious Fraud Office.) to investigate our case ---- the criteria of our case ticked all their boxes. --- we were instructed not to send them

any documents/evidence.------ in fact they wrote to us advising us to go to the Citizen's Advice Bureau.(CAB.)

Richard Alderman the SFO boss ---- who responded to our letter was the same man who would not investigate the “ Madoff” scandal or the “Libor” fiasco.

The MP's committee ---- said he was sloppy--- and the SFO was run like “ Fred Karno's Circus” ----- it was an office of fraud.----- so there.


Our M.P. approached our local Chief Constable to investigate----- he was called---- Sir Norman Bettison--- Chief Constable of West Yorkshire Police ---- a force that made “ Dad's Army” look like the S.A.S. They were inept – corrupt ---malicious --- from top to bottom. We were criminally dealt with by the Forces Solicitor---- the Head of the Economic Crime Unit ----and the Chief Constable ----- so there.


We were then advised to pass our complaint against West Yorkshire Police to the I.P.C.C. – which we did --- they advised us to make our complaint to ---- the West Yorkshire Police --- we did with reluctance --- all we got was abuse and obfuscation. ----- so there.


Sir Norman Bettison ---- The Forces solicitor--- and the Head of the Economic Crime ---- have all been removed from their posts and facing criminal allegations.

------ so there.


We even sought justice through the Courts --- culminating in a visit to the Court of Appeal-London.--- On leaving the Courts of Appeal that day our barrister a “rising star” informed us --- that if that was British Justice then you can keep it. He quit the law and moved to Canada ----- so there.


A few years later we learned that one of the judges ( Lord Justice.) in our case at the Court of Appeal was related to a senior executive of the Pictet Bank -----so there.


The Ministry of Justice passed our case to Lord Myners to investigate --- we would rather have had Mickey Mouse or Donald Duck do it. --- to this day we don't know

---whether he did anything or not ---- probably not --- seeing that his wife was on the Pictet Prix Board.


Pictet & Cie .Bank --- voted private bank of the year 2013.

Ivan Pictet ---- Voted banker of the year 2012. ---- the senior partner --- lied on numerous occasions and had documents destroyed --- also said genuine documents were forgeries. ----- so there.


Ivan Pictet in Oct. 2013 ---- Given the Legion of Honour --- but saying that ---- honours were given to Hitler --- Eichmann --- Mussolini ---Franco --- he's in fitting company. ----so there.


MONTY RAPHAEL.Q.C. -- Peters & Peters.London. They were the banks lawyers.

Monty Raphael.Q.C. along with Ivan Pictet withheld crucial documents requested by the High Court ---- the FSA ---- and the police Fraud Squad. ----so there.


Monty Raphael.Q.C. became an Honorary Queens Counsellor in March. 2012.

Monty Raphael.Q.C. became a Master of the Bench in Nov.2012.

An expert in Fraud ---the Doyen of Fraud Lawyers. ----- so there.


This says a lot about Banks --- and their lawyers --the consensus of opinion is that they are highly paid “crooks” ---- no wonder they voted Ivan Pictet banker of the year. --- and Monty Raphael a Queens Counsellor – “crime does pay”?


It appears that crimes in the “establishment.” are honoured by their peers.

HONOURS AMONG THIEVES.”


Full Story.---- “google ”


Insert.----- The Crimes of ----- Pictet & Cie Bank.

or insert

Ivan Pictet/ Monty Raphael Q.C.

JackLoach
JackLoach



Swiss Bank Accounts. March.2015.


Is your monies safe in these accounts ---- definitely NOT.

Would you get your money back if every body decided to withdraw all their accounts – NO WAY.

Economic Experts say that there would only enough money to repay 50% of their clients.

Are you going to be in the 50% --- that loose your money.-- Get it out NOW.


2012 -- - June. -- Published in Anglo INFO .Geneva.--- USA Trust Fund Investors were sent false and fraudulent documents by Pictet Bank.Switzerland. in order to collect large fees. ( Like MADOFF) ---Even after the SEC in the USA uncovered the fraud Pictet continued to charge fees and drain whatever was left in these accounts. Estimated that $90,000,000 million lost in this Pictet Ponzi scheme.


2012 - - - July. -- De – Spiegel. -- states – Pictet Bank uses a letterbox company in

Panama and a tax loophole involving investments in London to gain

German millionaires as clients.

2012 - - - August ---- German Opposition Leader accuses Swiss Banks of "organised crime."


All the fines that crooked Swiss banks have incurred in the last few years exceeds £75.Billion.

It is also calculated that the secrecy " agreements" with regards to tax evation by their clients will cost the banks another £450 Billion.( paid out of your monies.).


The banks are panicking --- the are quickly restructuring their banks ---- from partnerships --

to " LIMITED COMPANIES." ----- this will probably mean that in the future --- they could

pay you only 10% of your monies " if you are one of the lucky ones" ---- and it be legal.


Google ---- The Crimes of ---- Pictet & Cie Bank.