Comments on: How Europe’s banking crises threaten the eurozone http://blogs.reuters.com/felix-salmon/2012/05/16/how-europes-banking-crises-threaten-the-eurozone/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: breezinthru http://blogs.reuters.com/felix-salmon/2012/05/16/how-europes-banking-crises-threaten-the-eurozone/comment-page-1/#comment-39256 Mon, 21 May 2012 02:44:17 +0000 http://blogs.reuters.com/felix-salmon/?p=14107#comment-39256 Perhaps Spain should quickly enact principal reductions to fair market value for the loans that are still performing. When the mortgage holders are once again able to build equity, they will stop walking away and there will finally be a floor under falling home prices.

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By: VINIBOMBA http://blogs.reuters.com/felix-salmon/2012/05/16/how-europes-banking-crises-threaten-the-eurozone/comment-page-1/#comment-39206 Fri, 18 May 2012 14:34:06 +0000 http://blogs.reuters.com/felix-salmon/?p=14107#comment-39206 THIS MAY BE THE END OF THE EU. THEY TRIED BUT IT WILL NOT WORK DUE TO NATIONS LIKE THEIR OWN POLITICS OVE OTHERS

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By: VINIBOMBA http://blogs.reuters.com/felix-salmon/2012/05/16/how-europes-banking-crises-threaten-the-eurozone/comment-page-1/#comment-39208 Fri, 18 May 2012 14:34:06 +0000 http://blogs.reuters.com/felix-salmon/?p=14107#comment-39208 THIS MAY BE THE END OF THE EU. THEY TRIED BUT IT WILL NOT WORK DUE TO NATIONS LIKE THEIR OWN POLITICS OVE OTHERS

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By: VINIBOMBA http://blogs.reuters.com/felix-salmon/2012/05/16/how-europes-banking-crises-threaten-the-eurozone/comment-page-1/#comment-39203 Fri, 18 May 2012 14:33:55 +0000 http://blogs.reuters.com/felix-salmon/?p=14107#comment-39203 THIS MAY BE THE END OF THE EU. THEY TRIED BUT IT WILL NOT WORK DUE TO NATIONS LIKE THEIR OWN POLITICS OVE OTHERS

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By: emiliano http://blogs.reuters.com/felix-salmon/2012/05/16/how-europes-banking-crises-threaten-the-eurozone/comment-page-1/#comment-39162 Thu, 17 May 2012 18:41:56 +0000 http://blogs.reuters.com/felix-salmon/?p=14107#comment-39162 I appreciated the first chart. However, the rest of the article is full of silly ideas that must have just been the first thing that popped into the author’s head.

Surely the insolvency of the Greek banking system involves quite a bit more than whether or not there is enough cash on hand to meet immediate transaction needs! How much confidence in your bank would you have if you were told not to worry, because if you need to withdraw $20 for lunch, they had it.

And yes, Cyprus will be a lot safer than Greece to store money, because Cyprus isn’t imminently dropping out of the Eurozone, and about to convert Euros held in its banks into a weak successor currency.

And how does a chart showing non-performing loans rising four years ago proves the Spanish banking system is “only getting increasingly precarious”?

Sloppy, sloppy journalism.

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By: Woj http://blogs.reuters.com/felix-salmon/2012/05/16/how-europes-banking-crises-threaten-the-eurozone/comment-page-1/#comment-39147 Thu, 17 May 2012 14:16:07 +0000 http://blogs.reuters.com/felix-salmon/?p=14107#comment-39147 As Peter Dorman points out, recognition that Greece may be covertly pushed off the Euro should/will spark fears amongst depositors within other peripheral countries. Just this morning Zero Hedge reports that a Nationalized Spanish Bank Plummets On News Of Bank Run:
From FT:
Shares in Bankia, the Spanish bank which was part-nationalised last week, plunged by over a quarter on Thursday morning, after a report that customers had withdrawn €1bn from the bank over the past week.

The ECB/EU/IMF have been fairly successful, to date, at kicking the can down the road. Sadly this extra time has not been used to enact effective measures for resolving the underlying problems. Further attempts to buy time should be expected, but as these bank runs accelerate it will become increasingly difficult to stem the tide. Nearly 3 years after the first Greek bailout the Eurozone crisis may finally be approaching the endgame. Despite the enormous costs to a disorderly dissolution, I remain unconvinced that politicians will overcome their differences in some type of “grand bargain.”

http://bubblesandbusts.blogspot.com/2012  /05/bank-runs-begin-can-europe-put-geni e.html

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By: GRRR http://blogs.reuters.com/felix-salmon/2012/05/16/how-europes-banking-crises-threaten-the-eurozone/comment-page-1/#comment-39132 Thu, 17 May 2012 00:22:00 +0000 http://blogs.reuters.com/felix-salmon/?p=14107#comment-39132 It may be that a German bank protects a Greek’s Gyros ;) from disappearing, but it does not hedge against the devaluation of one’s money, were a Greek exit to occur.

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By: handleym http://blogs.reuters.com/felix-salmon/2012/05/16/how-europes-banking-crises-threaten-the-eurozone/comment-page-1/#comment-39118 Wed, 16 May 2012 20:25:25 +0000 http://blogs.reuters.com/felix-salmon/?p=14107#comment-39118 Of course Capital Controls could have (and still can) reduced the scope of the problem. Plenty of countries in the world have imposed capital controls in times of crisis (the most recent very public example being the smarter Asian countries in the late 90s) and it generally has worked out OK — that is, better than the likely alternative.

It would be an interesting investigation as to whether it was theology (“capital controls are the spawn of the devil” as truly believed) or simple corruption that has prevented the idea from even being seriously raised, let alone implemented, in Greece.
(And yeah, yeah, I’m sure there are probably various EU laws Greece has signed up to that prevent capital controls. You’ll notice that when it’s convenient for the wealthy in EU countries to ignore these laws — 3% deficit, 60% debt, anyone? — those laws have just been ignored.)

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By: Matthew_Saroff http://blogs.reuters.com/felix-salmon/2012/05/16/how-europes-banking-crises-threaten-the-eurozone/comment-page-1/#comment-39113 Wed, 16 May 2012 19:23:14 +0000 http://blogs.reuters.com/felix-salmon/?p=14107#comment-39113 Ummmm….The US did not have a common language per se until after WWII.

There were places in the midwest where you needed to know German to get around, etc.

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By: realist50 http://blogs.reuters.com/felix-salmon/2012/05/16/how-europes-banking-crises-threaten-the-eurozone/comment-page-1/#comment-39109 Wed, 16 May 2012 18:07:06 +0000 http://blogs.reuters.com/felix-salmon/?p=14107#comment-39109 Lady / QCIC – I’d add language / cultural barriers to that list of why Greeks won’t move to other countries, which is also a big underlying problem with the Eurozone.

To be politically tenable, a large degree of fiscal union across the Euro-zone would require some combination of an electorate who thinks of themselves primarily as “Europeans” rather than citizens of particular nations, labor mobility across countries (which would help harmonize inflation rates, productivity, etc.), and direct election of central decisionmakers. It’s not a coincidence that the U.S. federal government didn’t spend much money until people thought of themselves primarily as “Americans” rather than “New Yorkers” or “Virginians”, which took a long time (and a bloody Civil War) even in a nation that had a common language.

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