debt crisis
Tuesday, March 8, 2011
Broken Rubber On Boot Glue Fix?
Again banks
debt crisis
Soon it again in Europe: debt crisis
source. But the politicians to conceal the fragile position of their banks. This is the core of € the crisis.
The crisis has again arrived where they once began. conceal
By Christian Siedenbiedel
only an issue of Europe Heads of Government: the unstable situation of the banks. The politicians give the impression that it already in crisis, only to the States - to mainly at the periphery of the euro zone. Greece, Portugal, Ireland and so on.
A look back
But that's not true. It also deals with banks. Also, to German banks. This is worth looking back to the rescue of Ireland last fall. Europe urged Ireland almost among European rescue. Why? Chancellor Angela Merkel defended the rescue of Ireland time as the euro rescue. "To maintain the strong position of the euro, we need to eliminate the weaknesses."
among economists makes the rounds, however, a more plausible explanation: The Irish government had then considered to give up using the rescue funds. But they wanted to their banks, which stood on the brink of sending in an insolvency procedure. But then the creditors would have had to bleed the Irish banks and give at least a portion of their claims have. That would have just met the German banks strong. No wonder that the idea was met with fierce opposition in the Council - particularly with the Germans. Gerhard Schick, financial spokesman the Greens in the Bundestag, said: "All indications are that it's been the real reason."
In essence, a banking crisis
The crisis has again arrived where she began again, with the banks. From financial crisis, one had been learned, had become a global economic crisis - and then a crisis of debt and currencies.
Now showing: The euro crisis is essentially a banking crisis, in the double sense: banks in countries like Ireland are the reason that the debt of these countries at the end was so overwhelming. And prevents the weakness of banks in countries such as Germany, that the creditors the states are appropriately involved in the eradication of debt.
dear life cycle
"The fact that it has not yet dared to perform in Greece or a debt cut, has to do with the fact that the banking sector is not strong enough to absorb the losses," says Clemens Fuest, finance scholars in Oxford.
Europe has decided to ask the citizens of the crisis in the cashier and to let them get away scot-free banks. From private, public debt as debt. If then the States can no longer have to help the other states. The strong states in turn save the weak states with Money they borrow from their banks. An expensive circuit.
This works only because the banks in relation to the States are so incredibly grown up. "But the Anglo Irish Bank in Ireland, a life in the amount needed by 20 percent of annual gross domestic product of Ireland," said Fuest. For Spain, there is concern that many loans of savings banks are lazy. Because real estate, financed it, rapidly lost value. "No one knows how expensive is it," said Fuest, "but fears ranging from five to 40 percent of annual GDP."
preparations for the next round
How exactly is it about German banks, is one of the best kept secrets. Last Friday, the preparations for new so-called stress tests have begun. Such tests are to play through, the threats are the banks, if anywhere in the world, something dramatic happened.
To get the banks to scenarios, given that they einfüttern in their computers - the results must then notify the supervisor.
If you would make the strict enough, it would be a good idea. "Accurate stress tests would show that many banks still have huge hidden liabilities," said Hans-Werner Sinn, the head of the Munich Ifo Institute. The banks However, no interest to permit rigorous stress tests - and they have influence on their design (see bank stress tests are softened). Finally, they can threaten, if the stress test is too severe, falling by many of us. Then pull their money from savers. Banks go bankrupt. And the state has to save her. Ifo-Chef sense says so: ". The new stress tests, these hidden liabilities of the banks to disclose any more than did the old"
acid test of national bankruptcy
The latest stress test last summer were a scandal. At least 91 banks were then examined. Up to 14 were by all. The Irish - a few weeks later with a billion-dollar program had to be rescued (see German banks are catching up to do).
is above all a scenario probably not re-examined: What happens when a country in Europe actually logs on national bankruptcy? Then the banks would have to deal with their loans that is different. In exchange losses they have to correct only the value of those bonds that they hold in the so-called trading books. If a borrower but fails completely, they would have to write off the debts in the so-called bank book. There but many banks had shifted in the crisis sensitive securities. may have
The effects of the problems in the peripheral countries to German banks, the example LBBW. The largest German Land Bank in Stuttgart had the last stress test government bonds for 79 billion euros in their accounts. Now she had to write off 700 million euros - and made a loss. A glimpse of how delicate the issue is.
thin cushion
largely nebulous is how much German money was ever given to countries such as Ireland. While the Bank for International Settlements proceeds of more than 100 billion euros assets of German banks alone against Ireland had Bundesbank vice president Franz-Christoph Zeitler in November, the "actual exposure" played down to around 25 billion euros. But this is still a lot of money.
Especially since the cushion of the banks in Germany is still thin. No wonder that of all the German Bundesbank is opposed to rigorous stress tests. On average, German banks are not even on an equity ratio of five per cent, suggests a study of the Berlin research institute DIW. It would make sense "ten percent or more," says economist Fuest. Finally, protects a high level of equity the banks in case of unexpected losses - then shareholders should not bear the loss, the taxpayer.
To stabilize the financial system permanently, the policy would require the banks more capital as a buffer, according to mind: "What happened there, is by far not "But the banks are fighting vehemently against it -. foremost German Bank CEO Josef Ackermann.
The Irishman in any case wanted to renegotiate its rescue package. "As Ireland has slipped under the European rescue, the country has taken over responsibility for Europe," argues the Irish economist Edgar Morgenroth. "That's why other countries should now meet Ireland in the negotiations for lower interest rates." So the motto: We Irishmen have saved your banks. Now you show gratitude times.
Source: FAZ.net
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