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Calls For New EU Financial Order Increase As Total Meltdown Becomes Likely
Posted By aaron On September 29, 2008 @ 2:03 pm In Globalism,Old Infowars Posts Style | Comments Disabled
September 29, 2008
With major European banks now failing, calls have increased for an entire restructuring of the financial system under a centralized EU supervisory body.
With Belgian-Dutch group Fortis becoming the first major European bank to buckle, British mortgage lender Bradford & Bingley also being nationalized, as well as several other banks failing in Iceland, Denmark and Germany, economists have warned that more are teetering on the brink and only a radical centralization of power in Europe can stave off financial ruin.
Earlier this month, German economist Daniel Gros warned in a report for the Centre for European Policy Studies (CEPS) that several European banks have become so large that their governments would no longer be able to save them. Should they fail no rescue would be possible because the economy of the home nations are smaller than the banks that reside within them.
Now, in an interview with Dutch newspaper Volkskrant, Gros warns that European giants like Deutsche Bank, Barclays and UBS (Switzerland) are dangerously close to folding.
The Deutsche Bank has 2, 000 billion euros of open credit, one fifth of the german economy, while Barclays has 1, 640 billion euros of open credit, more than the entire UK economy.
Gros has proposed that European Parliament balance the books of the affected banks and that a new system of financial supervision is created with a 12 member body to overlook the European financial market.
In October the European Commission will propose new rules governing how much banks must keep in reserves, and set rules on how regulators should act if a bank is in danger of collapse.
Top EU officials, including economy commissioner Joaquin Almunia, have stated that the EU should have greater powers to regulate and intervene in the operations of financial institutions across Europe.
“The latest events in financial markets have made it clear that the current model of regulation and supervision needs to be revamped,” Almunia has said.
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