News Analysis: The European Union Banking Agreement recently agreed to, some say, gives False Hope regarding Control Over and Liquidation, if necessary, of ‘Non-Performing’ Banks. Contractually, many various groups would assess the viability of a Bank, and if needed, Bond Holders, Stock Holders, and DEPOSITORS would have to pay for the pending debacle (as was done in Cyprus). In this manner, Governments would not be financially liable for Bad Management at Banks. Why a Mere Depositor who has NO CONTROL over Banking Decisions nor Ownership directly or indirectly, in the Bank, should be held liable is baffling to many people. This would be analogous to sending One’s Shirts to a Laundry and being liable for that Business’s Debts! What is the difference? As to Depositors, Very Specious Thinking brought about such a European Union Banking Decision, one might argue.
That various groups composed of a total of over 100 persons are to efficiently and quickly assess a Bank is a ‘Mental Fantasy’, some Bankers say. Debate for weeks is not acceptable during such events.
A 55 Billion Euro Fund is to be developed for the cover collapses of Banks; many people think that is too little.
Also, are there ANY provisions to have Forensic Accountants review a “Collapsing” Bank’s Books, immediately prior to default? This, to see if any Illegal Financial Machinations occurred by the Bank’s Management? If not, why not? What Punitive Measures are in force for illegal or ‘tainted’ Banking activities?
“Bankers, in their role of ‘Bankers’, control the Monies of OTHERS, Not Their Own.” All too often, it seems that this Simple Premise ‘Escapes’ the conscious mentality of Bankers; that is when Defalcations and other problems arise.
It appears to many Europeans that, as regards to this ‘Banking Solution’, “Improper Medication” to a Patient may make him sicker than his Actual Illness.
Reality.