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Italy’s teetering banks will be Europe’s next crisis

economist.com

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Re: Italy’s teetering banks will be Europe’s next crisis

#31

Post by antr »

guelo wrote: post #24

It’s easy for Merkel to insist that Italy has to strictly follow EU rules since she doesn’t have to win an Italian election. The Euro just seems like a complete failure. Giant economies are limping along with 20% unemployment, unable to recover 8 years after the recession. In contrast the US has managed an OK recovery, now closing in on full employment. The problem is that each EU national leader is accountable only…

What does Merkel got to do with bad risk management and lax lending criteria by Italian banks? I struggle to find a link between your comment and the article.

Re: Italy’s teetering banks will be Europe’s next crisis

#32

Post by phee »

yulaow wrote: post #6
danielvf wrote: post #3

Earlier quoted context omitted.

If not Italy, what do you think would be Europe's next couple economic crisis countries?

Here in EU, ironically, the talk these weeks is about German Banks... yeah, I too was surprised. https://www.theguardian.com/business/2016/feb/10/deutsche-ba...

As far as I can understand DB troubles aren't that urgent, but this way Germans believe they're the ones needing bailout so Merkel can get away with saving MPS without losing much consent.

Re: Italy’s teetering banks will be Europe’s next crisis

#33

Post by pjmlp »

guelo wrote: post #24

It’s easy for Merkel to insist that Italy has to strictly follow EU rules since she doesn’t have to win an Italian election. The Euro just seems like a complete failure. Giant economies are limping along with 20% unemployment, unable to recover 8 years after the recession. In contrast the US has managed an OK recovery, now closing in on full employment. The problem is that each EU national leader is accountable only…

As a foreign living in Germany I do appreciate the mentality that things "should be done the correct way", but many here don't understand you cannot just change a country's culture by forcing them to strictly follow EU rules.

As it has already been proven by the lumping economies in the southern Europe, people will suffer and everyone will just make use of black market for jobs and goods to survive at any cost or just leave the country thus making it even poorer in available resources to lift it up.

Now Italy is also in the game.

Assuming the Brexit works for the UK, I am just waiting to see who's next.

Re: Italy’s teetering banks will be Europe’s next crisis

#34

Post by charlesdm »

pjmlp wrote: post #33
guelo wrote: post #24

It’s easy for Merkel to insist that Italy has to strictly follow EU rules since she doesn’t have to win an Italian election. The Euro just seems like a complete failure. Giant economies are limping along with 20% unemployment, unable to recover 8 years after the recession. In contrast the US has managed an OK recovery, now closing in on full employment. The problem is that each EU national leader is accountable only…

As a foreign living in Germany I do appreciate the mentality that things "should be done the correct way", but many here don't understand you cannot just change a country's culture by forcing them to strictly follow EU rules. As it has already been proven by the lumping economies in the southern Europe, people will suffer and everyone will just make use of black market for jobs and goods to survive at any cost or jus…

As often with things in life, is there really a correct way? I mean, yes, there are laws saying banks cannot receive state aid, but they were only introduced recently.

Does that really mean we should let a massive bank (or multiple banks) go bankrupt? Given the global financial system is so interconnected, only a fool would think this would have no impact to the german economy. I don't mind rules, but every rule is meant to be broken if the situation warrants it.

Re: Italy’s teetering banks will be Europe’s next crisis

#35

Post by LoSboccacc »

Hermel wrote: post #27
guelo wrote: post #24

It’s easy for Merkel to insist that Italy has to strictly follow EU rules since she doesn’t have to win an Italian election. The Euro just seems like a complete failure. Giant economies are limping along with 20% unemployment, unable to recover 8 years after the recession. In contrast the US has managed an OK recovery, now closing in on full employment. The problem is that each EU national leader is accountable only…

It would already help a lot if the European commission was democratically elected and if the European parliament was given the power to make laws. (It sounds like a joke, but the European parliament cannot propose new laws - even though that's the usual purpose of a parliament. It is the commission that proposes new laws in the EU.)

It would also help if richer nation wouldn't be able to poison the parliament votes by baiting and switch poorer countries (in the form of give us votes, well'send financial aid - see Germany Greece and for the next episode, Germany Turkey)

Re: Italy’s teetering banks will be Europe’s next crisis

#36

Post by Dylan16807 »

blahi wrote: post #25
ZenoArrow wrote: post #23

Earlier quoted context omitted.

It's worse than just fractional reserve banking. The vast majority of the money supply is based off debt. Would recommend watching the 4 minute introduction on the Positive Money homepage for a quick overview of the current situation with money creation: http://positivemoney.org/

The world's population in the 1900 was 1,5B people. By 1970, it was twice that. By the year 2000, it was twice that again! And by 2050 it will be 9B. Where does the money for all those people would come from if not from borrowing (money from the future)?

You can just print more money in proportion to population growth. While keeping a stable minimum reserve percent.

Re: Italy’s teetering banks will be Europe’s next crisis

#37

Post by [deleted] »

Dylan16807 wrote: post #36
blahi wrote: post #25

Earlier quoted context omitted.

The world's population in the 1900 was 1,5B people. By 1970, it was twice that. By the year 2000, it was twice that again! And by 2050 it will be 9B. Where does the money for all those people would come from if not from borrowing (money from the future)?

You can just print more money in proportion to population growth. While keeping a stable minimum reserve percent.

[deleted]

Re: Italy’s teetering banks will be Europe’s next crisis

#38

Post by mseebach »

pmontra wrote: post #13
toomuchtodo wrote: post #9

Earlier quoted context omitted.

What do you think the likelihood is of a run on Italian banks? I'm curious if you're average Italian citizen is aware of what a supposed bail in would subject depositors to (anything above a certain euro amount would be wiped out, such that occurred in Cyprus as one of the links in this thread notes).

The limit is 100k Euro. There is a fund to save deposits under 100k if a bank collapses. The problem is that there is no enough money to save every single depositor under 100k if enough banks are in trouble. That in Italy and everywhere else.

That limit either was, or was very close to being, ignored in Cyprus. You'd be foolish to bet €100k on that limit being hard if the shit hits the fan in Italy (which is a lot bigger than Cyprus and doesn't have anywhere near as much dirty Russian money they can grab instead). Also, the limit is for nought if Italy leaves the Eurozone and your savings are forcefully converted to "New Lira" (which are then "protected", but worth a lot less).

TL;DR: If you have cash in Italian banks, GTFOASAP. If you're a "good guy", buy hard Italian assets (perhaps property), so the money (perhaps) stays in the country, otherwise, get an offshore account (even if declared, and thus perfectly legal, it's much less likely that the Italian government will be successful in grabbing the money, especially if you pick a non-EU jurisdiction, but IANAL).

Re: Italy’s teetering banks will be Europe’s next crisis

#39

Post by LoSboccacc »

toomuchtodo wrote: post #9
davidw wrote: post #7

Earlier quoted context omitted.

You're saying that cover is insulting to clowns? Having lived most of the past 15 years in Italy, I think a lot of the criticism is justified.

What do you think the likelihood is of a run on Italian banks? I'm curious if you're average Italian citizen is aware of what a supposed bail in would subject depositors to (anything above a certain euro amount would be wiped out, such that occurred in Cyprus as one of the links in this thread notes).

the real issue here is the central bank authority which should do the supervision on private banks. a significant number of italian banks right now are under a commissioner from the central bank for being near death in the past decade after the subprime crisis.

that's a serious thing: the whole cda gets thrown out and replaced by cronies from the central bank. now it's surfacing that these cronies, who should have done nothing but supervise, have no idea of how deep the bank they're directly supervising rabbit hole is. (the central bank supervises all others indirectly at least)

but this is kept under wrap for now from the general public. it's very easy to keep these thing from people minds as everyone just want to look elsewhere when faced with a problem larger than their close group of friend.

and that's making matter worse. a new kind of financial crisis is brewing here.

Re: Italy’s teetering banks will be Europe’s next crisis

#40

Post by choult »

aphextron wrote: post #28
jcranmer wrote: post #16

Earlier quoted context omitted.

There's just been three digs at Berlusconi on the NA cover (plus another on the EU cover that wasn't on the NA cover that I'm aware of)--one of which was nothing more than an addition on the bill of bailouts of Eastern Europe saying "Silvio to go (if only)". In 1998 alone, there are 5 digs at Clinton over the Monica Lewinsky scandal. Three in 2000 at Bush, and several more over the course of the presidency (to be fai…

>In 1998 alone, there are 5 digs at Clinton over the Monica Lewinsky scandal. Three in 2000 at Bush, and several more over the course of the presidency (to be fair, Bush kinda was an easy target for this sort of stuff)--and they endorsed him. Vladimir Putin has also been a sore point for them (Vlad the Impaler all the way back in 2003? I'd forgotten Putin's been around that long...). The 2008 Super Tuesday issue had…

The BBC is clearly doing a pretty good job at being unbiased (as per its mandate) as _everyone_ thinks it's biased against _them_.

In reality, in an attempt at balance, the Beeb generall gives too much time to fringe views, often lending the appearance of legitimacy to them. (cf. Their climate change coverage up until fairly recently)

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