The way Europe handles the issue of supporting insolvent banks by shareholders, bondholders and depositors could be considered unsuccessful , frivolous , and perhaps naive. But because it can not believe that the European authorities and the leading European bankers are so gullible , the case " smell " other unknown at this time considerations.
Let's look at it in detail:
Europe decided that when a European bank is ready to fail should put the money in order of its shareholders (correct and legitimate ) , who have homologs ( they took the risk of the bank, so there is a " far-fetched " logic in question ) and , finally , the depositors ( unreasonable and unjust ) .
Let's focus on the issue of depositors who are the most critical . First, depositors are not investors and savers is certainly ones taking the risk of trusting A or B bank and that risk is to bankrupt the bank and they can not get their deposits . Until now, these cases cover the whole banking system through security , namely the Guarantee fund them . Now Europe has announced that only deposits up to € 100,000 are guaranteed and are not at risk in any way . Of this amount or more, however , applicants will participate in saving the bank from bankruptcy .
This , despite the fact that it is illogical and unethical ( personal opinion that raises a lot of conversation ) , and is potentially dangerous for the banking system .
This announcement automatically triggers a series of reactions from citizens.
First , depositors will break all their deposits in more accounts will each contain less than 100,000 euros. Debates So to be safe anyone have bank deposit eurozone should his testimony be less than 100,000 euros.
Not stopping there, though the question : answering press after the ruling , the European authorities have clarified that in case of emergency will be the first capital increase ( ie borne by shareholders) , then you will be mowing the bonds of banks ( ie will incur bondholders ) and if you still need more money to bail out the bank , you will lose and depositors ( those over 100,000 euros ) their money .
They speak the chartogiakades the European Union as to cater to idiots .
From the moment you announced the problem of the bank , at the same time and not in order , the following will occur :
• The shares will fall to zero and none of the existing shareholders will not want to participate in the capital increase .
• The bondholders will want to sell their bonds and because no one buys their price would fall to zero .
• Depositors over € 100,000 will immediately withdraw their deposits and will send them to other banks . And because no one is ever sure , all depositors will withdraw their deposits and will send them to other banks because they are afraid that the insolvent bank will not be able to transact .
These moves will eliminate any possibility of the bank being rescued and therefore you need to get money from the Europeans .
So this whole bailout of banks falls on deaf ears because supposedly made for not putting money European citizens to rescue the banks. And because the project can not work , you still need the Europeans to pay the bride.
Not stopping there, though the impact of this project. When a bank goes bankrupt , receiving a strong blow and many banks do business with her. These will need to support it financially because of co-guarantees or because the insolvent bank owes money to all the others.
And because you can never be " just one cockroach in the kitchen " , shareholders , bondholders and depositors of other banks will worry that comes their turn . And some of them will begin to sell their shares , their bank bonds and withdraw their deposits and other " dangerous " European banks . And as they sell stocks and bonds and will withdraw their deposits , will cause problems in the rest of the banking system and the stock markets .
All of this is perfectly logical to happen and it is also quite certain that the " brains " of Brussels and the international banking system to have thought and have developed and the corresponding scenarios in their computer , having designed and always necessary in these administrative circles Plan B, C, D , etc.
Having therefore , although have thought about moving to these laws and communications means that another is the goal of this legislation. No way there is so much naivety and superficiality in grade stupidity leading to administrative agencies in Europe and in the entire European banking system .
So that ends with all of them ?
In simple , " naive " thought that says if you do not know what and why something is being done , better elimination. Eurozone starts and looks very dangerous place for someone to have his savings - perhaps chores .
Let's look at it in detail:
Europe decided that when a European bank is ready to fail should put the money in order of its shareholders (correct and legitimate ) , who have homologs ( they took the risk of the bank, so there is a " far-fetched " logic in question ) and , finally , the depositors ( unreasonable and unjust ) .
Let's focus on the issue of depositors who are the most critical . First, depositors are not investors and savers is certainly ones taking the risk of trusting A or B bank and that risk is to bankrupt the bank and they can not get their deposits . Until now, these cases cover the whole banking system through security , namely the Guarantee fund them . Now Europe has announced that only deposits up to € 100,000 are guaranteed and are not at risk in any way . Of this amount or more, however , applicants will participate in saving the bank from bankruptcy .
This , despite the fact that it is illogical and unethical ( personal opinion that raises a lot of conversation ) , and is potentially dangerous for the banking system .
This announcement automatically triggers a series of reactions from citizens.
First , depositors will break all their deposits in more accounts will each contain less than 100,000 euros. Debates So to be safe anyone have bank deposit eurozone should his testimony be less than 100,000 euros.
Not stopping there, though the question : answering press after the ruling , the European authorities have clarified that in case of emergency will be the first capital increase ( ie borne by shareholders) , then you will be mowing the bonds of banks ( ie will incur bondholders ) and if you still need more money to bail out the bank , you will lose and depositors ( those over 100,000 euros ) their money .
They speak the chartogiakades the European Union as to cater to idiots .
From the moment you announced the problem of the bank , at the same time and not in order , the following will occur :
• The shares will fall to zero and none of the existing shareholders will not want to participate in the capital increase .
• The bondholders will want to sell their bonds and because no one buys their price would fall to zero .
• Depositors over € 100,000 will immediately withdraw their deposits and will send them to other banks . And because no one is ever sure , all depositors will withdraw their deposits and will send them to other banks because they are afraid that the insolvent bank will not be able to transact .
These moves will eliminate any possibility of the bank being rescued and therefore you need to get money from the Europeans .
So this whole bailout of banks falls on deaf ears because supposedly made for not putting money European citizens to rescue the banks. And because the project can not work , you still need the Europeans to pay the bride.
Not stopping there, though the impact of this project. When a bank goes bankrupt , receiving a strong blow and many banks do business with her. These will need to support it financially because of co-guarantees or because the insolvent bank owes money to all the others.
And because you can never be " just one cockroach in the kitchen " , shareholders , bondholders and depositors of other banks will worry that comes their turn . And some of them will begin to sell their shares , their bank bonds and withdraw their deposits and other " dangerous " European banks . And as they sell stocks and bonds and will withdraw their deposits , will cause problems in the rest of the banking system and the stock markets .
All of this is perfectly logical to happen and it is also quite certain that the " brains " of Brussels and the international banking system to have thought and have developed and the corresponding scenarios in their computer , having designed and always necessary in these administrative circles Plan B, C, D , etc.
Having therefore , although have thought about moving to these laws and communications means that another is the goal of this legislation. No way there is so much naivety and superficiality in grade stupidity leading to administrative agencies in Europe and in the entire European banking system .
So that ends with all of them ?
In simple , " naive " thought that says if you do not know what and why something is being done , better elimination. Eurozone starts and looks very dangerous place for someone to have his savings - perhaps chores .
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