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EU not ready for banking collapse US style
by SOLARLIFE | September 12, 2008 at 12:14 pm | 454 views | 15 comments | 30 recommendations
At an informal summit at Nice in the south of France, the ministers are to analyse the current economic situation in Europe. France defends its defict. The european members consider how the EU should collectively respond to the spreading global economic malaise, starting with the sub-prime losses, now arrived at the EU banks. The ongoing US financial crisis, stops growth in Europe too. The EU finance ministers decided to tackle recession threat, keeping stable hard currency Euro and exports in balance.
As the euro declines to a one-year low against the dollar, EU finance ministers are set to meet in Nice to discuss what measures can be taken to avoid a European recession. Meanwhile, the EU internal market commissioner has warned Europe is not ready for a cross-border US-style banking collapse.
On Thursday (11 September) the euro dropped to its lowest level in 12 months to 1.3893 dollars amid fears that Europe is sliding towards a technical recession, defined as two consecutive quarters of contraction. The euro has fallen 1.9 percent this week.
Surveillance tools for Rating companies and banks are since 3 months under discussion. Insiders from the banking industry see a potential problem for banks registered NY stock market and based in Europe. The sub-prime crises is still the cause of protection modes.
The meeting will also cover EU monitoring of banks and other financial groups that operate across borders within the union.
Glancing across the Atlantic, ministers are fearful that the string of collapses of financial institutions in the US could spread to Europe, but where so far they have been contained by centralised US authorities, the patchwork of arrangements across Europe leaves the bloc vulnerable in the case of the collapse of a bank that operates in more than one member state.
Yesterday, EU internal market commissioner Charlie McCreevy warned Europe was not prepared in the event of a cross-border bank going belly-up."Let's imagine the failure of a cross-border bank. Are co-operation arrangements between ministries of finance, central banks and supervisors fit for purpose?" he said at a financial conference ahead of the finance ministers' meeting.
September 12, 2008 at 12:14 pm by SOLARLIFE, 454 views, 15 comments
Most RecentMost Recommended Comments (15)
at 12:54 on September 12th, 2008
SOLARLIFE, your text outside the highlight box comes from here.
You need to use the highlight tool to quote from outside sources. Sorry!
at 14:35 on September 12th, 2008
amyjudd thanks for link provided, needed some time. The second inserting of the highlight command is often not working, appears as a link. Correction done for second part.
at 14:55 on September 12th, 2008
SOLARLIFE, thanks for improving your story -- I can see you've put more effort into it. I've removed the flag and now more readers can see it. Thanks for your contribution.
at 15:04 on September 12th, 2008
amyjudd, you are welcome. Hope the european banks make it for a time now double highlighted. Just a joke. The biggest unanswered question at this bank and finance minister meeting at the french riviera was "Where is the money ?
at 15:01 on September 12th, 2008
SOLARLIFE, I like this story. It's good stuff.
And thanks for making the changes
at 15:28 on September 12th, 2008
SOLARLIFE, I like this story. It's good stuff.
at 15:54 on September 12th, 2008
Thanks rahul for Flag "EU and bank crisis meeting france", the Brasilian Real is very stable now. What is Venezuala currency, any Idea ?
at 18:55 on September 12th, 2008
The Venezuelan currency is artificially constant to keep up their oil revenue, it is attached to the dollar, governament had huge deficits and inflation is one of the highest in Latin America.
Venezuela has a strong black currency market, governament pretends to control exchange rates, but like everything that governments try to control, doesn't work. People makes a lot of money on the black currency market in Venezuela.
at 19:00 on September 12th, 2008
Many currencies are linked to the US Dollar or the Euro or the Swiss Franc, nothing bad about that.
THe Government does not control much at all, it is the Financial institutions that do most of the controlling and that could use some feather trimming.
at 19:06 on September 12th, 2008
I have been in Venezuela many times, they have an official currency value, you just cross the immigration, they offer you 20% more on your dollars, you take a cab, they offer you a 50% surplus, you get to the hotel, they offer you a 60% premium, then you go shop using dollars, they pay you a 100% premium.
Very interesting system! Russia had the same methodology under the Soviet Union.
at 19:25 on September 12th, 2008
So do most African and many Asian as well as other South American countries and even some Eastern European once. It has nothing to do with Socialism. More with the way we trade and broker currencies. Brazil used to have the same problems not so long ago.
at 19:42 on September 12th, 2008
I am not saying that is a problem related to communism, do I? That is a fiscal problem, governments with deficits keeping their currency attached to the dollar artificially. Brazil use to be like that forever, Fernando Henrique Cardoso has changed that, cut government expenses and let the Real floating free. Lula da Silva had the wisdom to keep the rules working, has been a tough 18 years since then.
Venezuela is a great country, don't take me wrong, the problem there is that they are under a very bad management.
I am responding to a question about currency, not making a judment on marxists here.
at 20:28 on September 12th, 2008
Fair enough. Venezuela does need some fiscal reforms, I agree and It may happen sooner rather then latter. Even with Chavez in power. THe South American trade and monetary union is actually a good idea. The US started out like that with the 13 first states and the EU did the same thing.
at 18:47 on September 12th, 2008
SOLARLIFE, I like this story. It's good stuff.
at 12:51 on September 13th, 2008
thanks rahul, luiz castro, Paschen for Flag "EU not ready for bank crisis us style", good explainer for Venezuala dollar coupled money, as the mercosur trade union mentioned by paschen. The eu must combine stability with economy. Most south american countries have their reserves in euros