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What the Eurozone Needs Is More Centralization
Be prepared for the next great transfer of wealth. Buy physical silver and storable food.
thedailybell.com / By Staff Report / April 8, 2013
A banking union for the Eurozone … The crisis has highlighted the need for, and difficulties with, a Eurozone banking union. This column argues that, to make a union, you need three crucial ingredients: common supervision, a single resolution mechanism, and common safety nets. The power to control and the resources to rescue must work in parallel. Eurozone leaders have taken the first critical steps, but further progress is needed to strengthen the financial architecture of the single currency. – Vox.com
Dominant Social Theme: This crazy Union needs some serious rules.
Free-Market Analysis: Vox posted this long and scholarly article that calls for more EUcentralization. You would think since the current level of centralization has worked so badly that its proponents would be searching for other answers. Not a chance.
As we have pointed out numerous times, top Eurocrats are on record for well over a decade (and probably longer) as saying that the EU needed a financial crisis to create a consensus for further political centralization. Well, they have the crisis, but the consensus seems to be lacking.
Enter scholarly articles such as this one that propose rules-based banking centralization in sonorous terms. The current top-down banking system in the EU to us resembles nothing so much as the Chinese system where it is pretended that banks are independent even though it is evident and obvious that the EU and the ECB serves as a coordinating force. Here’s more from the article:
Before the crisis, the common currency and single market promoted financial integration. Banks and financial institutions operated with ease across countries; credit went where it was in demand; and portfolios became increasingly more diversified. The interbank market functioned smoothly, and monetary conditions were relatively uniform across the Eurozone. There were side effects, such as large capital flows within the Eurozone and the associated buildup of sovereign and private-sector imbalances. But, by and large, a hybrid financial architecture based on a single currency and common market, and national-based financial safety nets, bank supervision and regulation seemed to serve the Eurozone well.
Thanks to BrotherJohnF
2013-04-08 11:03:16
Source: http://silveristhenew.com/2013/04/08/what-the-eurozone-needs-is-more-centralization/
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