The neuron squeeze of the European Finance Ministers on rules to be applied to banks at risk of bankruptcy has already been excellently summarized on this blog, together with theimpact it could have on savers and businesses.
I'm only interested in making a couple of additional petty reflections.
According to Michael Noonan, the Irish Finance Minister, we are facing "a milestone in the path that leads us to break the vicious circle between States and banks". But he thinks… it seems to me more than anything that the politicians of rich countries such as Germany and Finland have succeeded in minimizing the risk that their voters, as taxpayers, will have to bail out banks in other countries. So they, the politicians, maybe they will be re-elected and not impaled.
A typically Teutonic line of thought prevailed which seems to go more or less like this to customers and savers: “Did you give money to that bank? It's a YOUR investment choice. Then take care of yourself." Except then, who knows, raising objections in case the bank on the verge of bankruptcy turns out to be of German nationality (a bit like what happened in 2003 at the level of public accounts, when Germany and France violated the Stability Pact). I'm admittedly a bad-thinker.
Anyway, this agreement, this "milestone", according to the forward-looking Irish Minister Noonan, increases the risks for savers, I hope it is clear to you. The expensive e illiquid bank bonds that some of you bought, probably without knowing the tool well or well camouflaged shares, today are even more risky and smelly on average. Same for i deposits, if you are beyond the threshold of 100 thousand euros. Now more than ever it is necessary to read contracts and information notes carefully.
I'll give you a tip: now I expect that, subtly, banks of countries considered to be of sound and robust constitution, such as Germany for example, will come forward, offering you their bonds, showing you how solid their accounts are and how fantastic their bonds (or deposits) are ).
My opinion counts like dried figs. But for me what is decided in Europe, in the event of serious problems, will only cause fear and destabilization. Think about it: if the smell of default of an Italian bank, knowing that deposits can be touched, do not believe that the people will run to collect their savings? What would you do? Don't you think that many, out of prudence, are already carrying forward the work?
Thus, banks in the most problematic countries will be disadvantaged, because that is precisely where the capital flight will be concentrated. Well, we are facing a genius problem generation process. Perhaps the "vicious circle" cited by the lucid Irish Minister to create one has been broken another even worse, because it goes to touch the confidence of savers (should be taboo).
It must be said that the agreement can be modified (but hardly in substance) and will enter into force in 2018. But I'll say it right away: very straight antennas when dealing with your bank, now more than ever.
