IMF Report: European Banking Sector Is "Unst...

http://larouchepac.com/print/25882

IMF Report: European Banking Sector Is "Unstable," Demands Rapid Implementation Of Supranational Regime
March 17th, 2013 • 11:02 AM A new IMF report on the European financial system, published March 15, warns European governments that Europe's "financial stability is not secured." Even if, according to them, most institutions have enough capital to absorb "heavy overall economic shocks," in many EU countries, "old burdens" on the balance sheets remain "a problem." Quite a few banks may have underreported their bad debt and did not allocate enough loss reserves for write-offs, they say. The IMF demands that bank balance sheets be "repaired quickly," according to press reports. In its own words, this is the "first comprehensive" IMF analysis on the health of the EU financial sector. While the warning on Europe's "unstable financial sector" does reflect the growing panic about the breakdown of the system, it is also used to create maximum pressure for an immediate Darwinistic European financial bail-out regime. Thus, the IMF in the same statement demands quick implementation of the "banking union" in Europe, with central coordination by EU institutions. This includes a European deposit guarantee system, which would force all banks, including smaller and community banks, to pay for the losses of the megabanks. (The German government now claims to have succeeded in excluding S&Ls and community banks. This sector remains almost the only source of credit to the Mittelstand.) The IMF covers its demands with the pretense that this would enable a more rapid dissolution of bankrupt banks, so that the system as a whole would not be infected and the taxpayer would not have to pay any more. But as long as Glass-Steagall banking separation is not established, the whole thing won't lead anywhere but to supranational financial dictatorship, further bail-outs, and the destruction of the remaining elements of national financial systems that are still connected to the real economy. The IMF's line coheres with the SPD/Green demands, which call for "more Europe" in these matters.

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03/17/2013 10:22 PM

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