Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
No. Half of Europe's big banks would have been taken into receivership (because Europe actually has very sensible policy of vesting standing authority in various regulatory bodies to take insolvent financial institutions into receivership). A handful of smaller banks would have been killed off too, but nothing catastrophic.

Villager concern trolling notwithstanding, Frankfurt, London and New York are not the be-all-end-all of the banking system.

And Villager concern trolling notwithstanding, there is nothing that prevents the state from decisively stopping a cascading bank failure under existing law. All it requires is a willingness to tell the shareholders, the management, the hedge funds and a couple of the transnationals to take a long walk on a short pier. In short, to bankrupt a couple of score Villagers rather than bankrupting the country.

But I can see why that might be too strident and uncouth to ask demand that of our political class.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Dec 20th, 2009 at 10:58:15 AM EST
[ Parent ]
I've seen the results of Europes "sensible" bank policies. They look even worse than the American experience. Giant reckless real-estate bailouts in
Germany. Feckless bets on US junk mortgages in France. The English - let's not even go there. Have you heard of Ireland? Small nation in the west of the EU - just completely bankrupted the country to bail out banks. What about sensible Iceland? Do you even know about the Belgian banking collapse?

But of course, the first to collapse would have been the Eastern European state banks that got Lehman crap foisted off on them by Societe General and friends.

"All it requires is a willingness to tell the shareholders, the management, the hedge funds and a couple of the transnationals to take a long walk on a short pier. In short, to bankrupt a couple of score Villagers rather than bankrupting the country."

That's a strikingly ignorant statement. Seriously. A sane bank regulator, no matter how stupid, looking at the situation in 2007 and not worrying about a global crash and escalating depression would have been worse than corrupt.

by rootless2 on Sun Dec 20th, 2009 at 11:31:50 AM EST
[ Parent ]
I've seen the results of Europes "sensible" bank policies. They look even worse than the American experience.

The Bundesbank and the Spanish central bank have done about as good a job as can be done under the circumstances. The examples you pull out are due to the insane market fundies in our parliaments more than the regulators.

Whether they have managed to mishandle it more grossly than their American fellow faithful is something that will not become apparent until we begin to pull out of the depression.

A sane bank regulator, no matter how stupid, looking at the situation in 2007 and not worrying about a global crash and escalating depression would have been worse than corrupt.

Newsflash: We got a global crash and escalating depression. Destroying Wall Street could hardly have made the crash worse, and it would have removed a significant part of the opposition to sane and responsible fiscal and monetary policy going forward.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Dec 20th, 2009 at 02:36:43 PM EST
[ Parent ]
Newsflash: We got a global crash and escalating depression. Destroying Wall Street could hardly have made the crash worse, and it would have removed a significant part of the opposition to sane and responsible fiscal and monetary policy going forward.

- Jake

To you the difference between 10% unemployment and 30% unemployment may be nothing, but to me it's significant. Sue me.

by rootless2 on Sun Dec 20th, 2009 at 02:42:54 PM EST
[ Parent ]
"The Bundesbank and the Spanish central bank have done about as good a job as can be done under the circumstances. The examples you pull out are due to the insane market fundies in our parliaments more than the regulators."

Snort. Look up "regulatory arbitrage" and "europe" in a search engine.

by rootless2 on Sun Dec 20th, 2009 at 02:44:55 PM EST
[ Parent ]
Uhm, you have around 20 % unemployment at the moment if you count it the same way Europe does...

And you have no serious countercyclical fiscal policy in sight.

Breaking the banks might have gotten your unemployment up to 25 or 30 % for a year or two, but on the other hand you would have destroyed a significant part of the obstructionist opposition to the policies that could cut years off the depression.

Whether ten years at 20 % is preferable to one or two years at 30 % is, I suppose, a matter of taste...

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Dec 20th, 2009 at 02:49:34 PM EST
[ Parent ]
I mean 25% unemployment in Europe after the collapse of the central banks of hungary, poland, and baltics. But I bet you think that those EU central bank regulators could have patched it right up.
by rootless2 on Sun Dec 20th, 2009 at 03:29:18 PM EST
[ Parent ]
Hungary's problems are not nearly as serious as you think.

The Baltics are fucked because their politicians are neoliberal fundamentalists. No central banker in the world can save you from neoliberal politicians. (But no, the Baltic central banks have not impressed me.)

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Dec 20th, 2009 at 03:33:40 PM EST
[ Parent ]

Display:

Top Diaries

Occasional Series