Wednesday, October 12, 2011

So What Else is New?

Europeans are revolting.

Both Merkel and Sarkozy face political pressures that are becoming increasingly enmeshed with Europe's search for a solution to the euro-zone debt crisis. Facing a revolt to further bailouts among members of her center-right coalition, Merkel insists that banks should first seek capital from shareholders, then from their national governments. Only as a last resort should governments tap the EFSF to immunize their banks against financial contagion. France appeared to diverge from the German position earlier this week by emphasizing that euro-zone members should be able to tap the EFSF if banks can't raise capital from investors rather than requiring governments to first provide aid on a national level before using the European bailout fund. French banks are among the most exposed to troubled sovereign debt. And compared to European peers France's big banks are not as well capitalized, the International Monetary Fund warned in July.
Which primarily means that they should 'first seek capital from depositors' as opposed to taxpayers.

It will be the same damned thing when they finally recognize the scale of this stupidity: governments pressured banks to buy their bonds, which are no good, and now they are being pressured to use their depositors and investors (AKA: the public, including retirees' savings) to cover them.

Bend over and take one for the team government elite.