Skip to comments.Banks Build Contingency for Breakup of the Euro
Posted on 11/26/2011 9:58:19 PM PST by DeaconBenjamin
For the growing chorus of observers who fear that a breakup of the euro zone might be at hand, Chancellor Angela Merkel of Germany has a pointed rebuke: Its never going to happen.
But some banks are no longer so sure, especially as the sovereign debt crisis threatened to ensnare Germany itself this week, when investors began to question the nations stature as Europes main pillar of stability.
On Friday, Standard & Poors downgraded Belgiums credit standing to AA from AA+, saying it might not be able to cut its towering debt load any time soon. Ratings agencies this week cautioned that France could lose its AAA rating if the crisis grew. On Thursday, agencies lowered the ratings of Portugal and Hungary to junk.
While European leaders still say there is no need to draw up a Plan B, some of the worlds biggest banks, and their supervisors, are doing just that.
We cannot be, and are not, complacent on this front, Andrew Bailey, a regulator at Britains Financial Services Authority, said this week. We must not ignore the prospect of a disorderly departure of some countries from the euro zone, he said.
Banks including Merrill Lynch, Barclays Capital and Nomura issued a cascade of reports this week examining the likelihood of a breakup of the euro zone. The euro zone financial crisis has entered a far more dangerous phase, analysts at Nomura wrote on Friday. Unless the European Central Bank steps in to help where politicians have failed, a euro breakup now appears probable rather than possible, the bank said.
(Excerpt) Read more at nytimes.com ...
Let the Euro die, it will eventually.
I remember at the very beginning of the Euro (I was living in Europe at the time)...everyone had this positive spin on how it would change the future. The problem from day one....is that various European countries didn’t have the same standards as others....and you end up with a bunch of wannabe countries trying to get the same status as others.
"Never believe anything in politics until it has been officially denied."
The fiscal equivalent of depending on the Maginot Line.
I wonder what will happen to Greek citizens who have been prudent enough to move their money to non-Greek banks. Will they be forced to move their money back to Greece and have it forcibly converted to the drachma? What if they hide their money further afield like in Britain, Switzerland, the US or even in the Caymans?
Never believe anything in politics until it has been officially denied.”
That would only be delaying the inevitable if a universal currency comes about.
Agreed, the Euro will end. Bad idea to have a common currency with very uncommon cultures. That dog won’t hunt.
When “everyone” is saying the same thing, as Europeans were about the Euro, you know their is propaganda involved. There was plenty of honest debate missing from that decision. The European media is controlled like our media is controlled.
The European socialists figured they could impose their lofty “will” and undo the reality of Europe. It’s like they do with alternative energy when there is none. Or with what they did in inventing Obama, when he is really an empty suit.
Truer words were never spoken...
Credit Suisse recently said that bond yields in Italy and Spain are likely to reach 9% soon.
Wow! It is about over isn’t it. What is Credit Suisse time table.
Those would be ten-year bonds, BTW. The default process will run its course with those nations and more. The recent flood of accusations against countries to the north of them won’t change that. The others can only try to salvage as much as possible for their own economies.
ECB bond buying= CON-BONDS. Cause: Con-papers deception (false collateral)Insufficient national product output Deflation. (As in attempt to issue stock in a false or fictitious corp.) Fraud, Security fraud.
CON-BOND Purpose: RICO Asset distribution/theft.
1. Disproportionate monetization.
2. Indenture-ment: Backroom RICO wile.
e.g. U.S. Phony-Care, “Health-I.D.” , Super-State Vat-taxation, taxation wile.
6. Violation of Bill of Rights.
8. over-throw of bondage.
UNaccountable bureaucracies are junk and their bureaucrats need to go. Are you listening Congress?
“UNaccountable bureaucracies are junk and their bureaucrats need to go. Are you listening Congress? “
The only reason the US ain’t considered junk either is that the FED is printing 24h/7d. The germans insist on not let the ECB printing more money (The american way) but on cut spending.
I would not be surprised that banks in the USA, Canada, the more prosperous parts of Latin America, and most of Asia (Japan, South Korea, China, Hong Kong, Singapore, India and even the financial institutions in the Middle East that run under Islamic law) may have quietly entered into special agreements to protect each other once the European collapse occurs.
In the end, the 21st Century will end up being the Century of the Pacific as once the economy recovers most trade will be done across the Pacific Rim.