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25 October, 2014

A test for the next banking crisis: Eurozone TBTFs to eliminate competitors!

Do it like the USA!

globinfo freexchange

According to latest information, the US tax authorities have declared in a secret workshop of representatives of the EU, how to close a bank overnight, if it is broke. Before the announcement of the ECB stress tests, nervousness increases in the EU and the Member States: Apparently, several banks from the ECB's perspective will not be able to survive. If they can not be transferred quickly to a competitor, there will be threatening bank runs.

Between representatives of the EU and the United States Deposit Insurance Fund, Federal Deposit Insurance Corporation (FDIC) are practiced secret bank closures overnight. The United States had handled more than 500 banks during the financial crisis. Close to an ailing bank is almost a 'cloak and dagger operation', because this must be done within a very short time.

From November, the ECB will take over the banking supervision. For this purpose, a unified processing mechanism is established, which includes a process for closure of banks in the euro zone.

In the stress test of the ECB, allegedly 25 banks have not been able to meet the capital requirements of the ECB. That's amazing: Because the stress test has been applied rather harmless and certain risks were not considered.


The technical "assistance" by the US authorities is not accidental, as they have good experience in closing competitors and make Too Big To Fail (TBTF) monsters ... even bigger! According to chapter 20 conclusions of the US Financial Crisis Inquiry Commission: “As a result of the rescues and consolidation of financial institutions through failures and mergers during the crisis, the U.S. financial sector is now more concentrated than ever in the hands of a few very large, systemically significant institutions.” (

TBTFs secure their dominance through ECB's increased power, started two years ago: But also, decisions like the one concerning “bail ins”, could be turned to a useful tool for TBTFs according to various scenarios:

Furthermore, banksters promote additional financial deregulation on both sides of the Atlantic, using also TTIP agreement: "... the EU suggests a number of mechanisms that will both scale back existing regulation, and prevent future regulation that might contradict the interests of financial corporations from both sides of the Atlantic. The leak follows news that EU negotiators have increased political pressure on the US to accept negotiations on 'financial regulatory cooperation', which the US negotiators have so far refused.” (

Obviously, the TBTF banks strengthen further their position inside the eurozone, also with the help of the ECB this time. These "tests" are clearly focused on how they could eliminate competitors in a potential general banking crisis inside the eurozone.

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