European Banks and the Euro Will Destroy the World
gulfcoastcommentary.substack.com
This post is an excerpt of "Rising Risk of Financial and Economic Chaos, Part 2." It's so important that I felt it deserved to stand alone as a unique post. The Europeans never allowed any banks to fail during the GFC in 2008, whereas some 157 banks failed and many mergers were arranged in the US during that recession. So nothing was allowed to fail in Europe. No bad debt was eliminated. So EU bank stocks are at 30+ year lows because everyone knows that they are loaded up with bad loans that are papered-over with "mark to fantasy"ratings. The other reason that the EU is faced with a banking crisis is that negative interest rates has effectively crippled the profitability of banks along with profit-killing regulations. The craziest regulation of the EU banking system is the requirement of bail-ins using depositor money should there be a bank failure! That's crazy! Why would you want to scare away an important source of bank capital??? It's literally insane. It's the total inverse of our FDIC deposit safety net!
European Banks and the Euro Will Destroy the World
European Banks and the Euro Will Destroy the…
European Banks and the Euro Will Destroy the World
This post is an excerpt of "Rising Risk of Financial and Economic Chaos, Part 2." It's so important that I felt it deserved to stand alone as a unique post. The Europeans never allowed any banks to fail during the GFC in 2008, whereas some 157 banks failed and many mergers were arranged in the US during that recession. So nothing was allowed to fail in Europe. No bad debt was eliminated. So EU bank stocks are at 30+ year lows because everyone knows that they are loaded up with bad loans that are papered-over with "mark to fantasy"ratings. The other reason that the EU is faced with a banking crisis is that negative interest rates has effectively crippled the profitability of banks along with profit-killing regulations. The craziest regulation of the EU banking system is the requirement of bail-ins using depositor money should there be a bank failure! That's crazy! Why would you want to scare away an important source of bank capital??? It's literally insane. It's the total inverse of our FDIC deposit safety net!