Draghi hands over to banks €77.7 billion more

Mario Draghi, Governor of the ECB, Olli Rehn, member of the EC in charge of Economic and Monetary Affairs and Michel Barnier, Member of the EC in charge of Internal Market and Services, (from left to right). The three of them are responsible of what is happening in Eurozone’s banking sector.

Mario Draghi, Governor of the ECB, Olli Rehn, member of the EC in charge of Economic and Monetary Affairs and Michel Barnier, Member of the EC in charge of Internal Market and Services, (from left to right). The three of them are responsible of what is happening in Eurozone’s banking sector.

The European Central Bank lent but in reality handed over yesterday 9 January a total amount of €77.7 billion to a number of Eurozone banks, under an arrangement called Main Refinancing Operation (MRO) at the negligible interest rate of 0.7% for a duration of 7 days. This is however the upper side of the iceberg.

It’s not the first time that the ECB gives out money for free to banks, the majority of whom are practically bankrupt. If it was not for the ECB the majority of the “systemic” Eurozone banks would have disappeared.

In practice the ECB is now acting in the Eurozone as “lender of last resort” for practically every bank, a function that the ECB’s governing council was denying until recently, not only because this is not allowed by the ECB’s statues, but also because they considered it as a breach to prudent monetary policy. With Mario Draghi in the top job of ECB though all that have become mere typicality.

“Super Mario” has now opened the coffers of Eurozone’s central bank to all and every careless, dangerous and other people’s money spinning banker. He knows this game well because he has served in New York’s banking gangs for many years. Those dreadful New Yorkers have managed even from 2008 to “persuade” the Washington administration to “support” them, with at least $3 trillion taxpayers’ and freshly printed money for free that is, at zero interest rates. But let’s take the story from the beginning.

The credit crunch

As everybody knows, after the great credit crunch of 2008 in New York and the economic crisis that followed, still taking its toll, governments and monetary authorities (central banks) alike all over the developed world have being handing out trillions of euros, dollars, yens and pound sterlings to “systemic” but bankrupt banking groups. Why? Because, those “systemic” banks in Eurozone, Britain, the US and the rest of the developed world hold hostage societies and governments alike, just by owning every national and international financial transaction system and controlling all markets.

This awkward situation was first acknowledged by the US when the George Bush administration, in the winter of 2008-2009, was forced to support the New York bankrupt financial conglomerates with trillions of dollars. After that a whole literature was developed, seemingly aided by the public relations budgets of big banks. The new stars of economic thought are now insisting that some banks are more equal than others in the trade, because without them our modern societies cannot function. If they go bankrupt and cease existing, a huge part of the real economy will go to a standstill and soon disintegrate. Who knows this may even be true…

The fact is that those banks are monopolising our needs for financial transactions. Unfortunately, no competition authority or public attorney in the entire world ever dared to send them to jail for forming trusts, practicing usurpation, unlawfully exploiting entire markets and spinning around other people’s money to forcefully steal value from the real economy. When their game doesn’t pay and go bankrupt, they ask for government and central bank money to recapitalise and start all over again.

In Eurozone

In Eurozone it was not directly the banks which went bankrupt. The special programmes though drafted by the troika of EU, ECB and the IMF to support some governments, have as an ultimate goal to save the “systemic” banks of Germany and France and to lesser degree of Ireland, Spain, Italy and Greece.
It was the bankers that pushed those countries on the cliff. Ireland is an unfortunate example of that.

All that may be known to the average reader of the economic columns. What is not widely known however has to do with the cost of resurrecting the bankrupt “systemic” banks.

According to well-informed sources the European Central Bank has spent around 30% of Eurozone’s Gross National Product amounting to €2.85 trillion, to ultimately support the banking system. Some of the money has being spent to buy sovereign junk bonds directly from banks, while most of it used to finance direct transfers to those lenders at almost zero interest rates.

The last trillion was paid to 5,000 Eurozone banks at the end of 2011 and the beginning of 2012 under extraordinary Long Term Refinancing Operation (LTRO), providing three year loans at almost zero interest rate. Those LTROs continued and the ECB gave out to banks another €28.5 billion during the last two months of 2012. Mario will be taking good care of banks also during this year starting with the €77.7bn mentioned above.

Is there a cure from banks?

The question is who can liberate us from the dynasty of banks. Fortunately enough in New York the authorities have started accusing and dearly fining certain lenders, but mainly the foreign ones operating there. HSBC and UBS have each being fined with almost $1.5bn. It’s a good start, even if the motives of the Americans are mainly to make the foreigners pay. It’s very doubtful if the Europeans can do the same for the US banks operating in Europe. It is also doubtful if the Americans will continue their probes on the US banks as well. Unfortunately the bank plague of our societies is not easily curable.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Support for EU remains at historically high level despite sceptics

How to maintain mental health in times of pandemic

MEPs propose more transparent legislative drafting and use of allowances

Celebrities are helping the UK’s schoolchildren learn during lockdown

New legislation on transparency and sustainability of the EU risk assessment model in the food chain

In Rome you can swap plastic bottles for metro tickets

Antitrust: Commission consults stakeholders on guidance for national courts when handling disclosure information

Portugal can use its economic recovery to build up resilience

14 ways to protect your mental health in the pandemic, according to Public Health England

Accountability in Sudan ‘crucial’ to avoid ‘further bloodshed’, says UN rights office

FROM THE FIELD: ‘Miraculous’ music made by hearing-impaired children

Air pollution could be responsible for 1 in 7 new cases of diabetes

World Refugee Day, 20 June 2020: Joint Statement by the European Commission and the High Representative

UN monitoring team in Yemen verifies pullout of armed forces from crucial port zones

Mass-graves found of at least 535 killed during ‘organized and planned’ inter-communal attacks in western DR Congo

Posting of workers: final vote on equal pay and working conditions

An overview of mental health impacts on women diagnosed with gynecologic cancer and suicide prevention

Autumn 2019 Economic Forecast: A challenging road ahead

After Rio Grande tragedy, UNICEF chief highlights ‘dire’ detention centres on US-Mexico border

Schools must look to the future when connecting students to the internet

COP25: UN climate change conference, 5 things you need to know

These dogs can smell tree disease – and could help save the world’s orange groves

What has a year of experiments taught us about basic income?

‘Are we ready for the age of disruption?’, Thailand’s Foreign Minister asks UN Assembly

Building climate resilience and peace, go hand in hand for Africa’s Sahel – UN forum

Much more than a ‘lifeline’ for millions of households, remittances can spur global growth, says UN agency

MEPs demand unprecedented support measures for EU firms and workers

Factory workers are facing a mental health crisis. Here’s how to respond

Will Cameron succeed in keeping UK inside the EU and reverse the present economic downturn?

UN agency chiefs issue ‘call to action’ on behalf of refugee children

EU Facility for Refugees in Turkey: third annual report shows continued vital and tangible support for refugees and their host communities

State aid: Commission opens in-depth investigation procedure into measures in favour of Béziers airport in France and Ryanair

Data and the future of financial services

COVID-19 not yet a pandemic, says UN health agency chief

Security Council unanimously agrees to extend UN Cyprus Mission amid political impasse

It takes far too long for a rare disease to be diagnosed. Here’s how that can change

Our poisonous air is harming our children’s brains

The five stages of the Chief Digital Officer – and why they often fail

Young health workforce – a core of effective primary healthcare?

‘Catastrophic’ healthcare costs put mothers and newborns at risk

European Union launches WTO trade dispute against Colombia’s unfair duties on frozen fries

UN relief official in Yemen condemns ‘horrific’ attack on passenger buses

IMF: How To Deal With Failed Banks

COP21 Breaking News_07 December: “Remove Roadblocks to Climate Action”

European Citizens’ Initiative: Commission decides to register 2 new initiatives

How to plan your company’s future during the pandemic

Trump badly cornered at home by agribusiness and steel consumer lobbies: Trade

This is why people live, work and stay in a growing city

Afghanistan: Civilian casualties exceed 10,000 for sixth straight year

Better care, stronger laws needed to save 30 million babies on the brink of death

Is it impossible to place the banks under control?

Zeid calls for ICC probe into Myanmar Rohingya crisis

Commissioner sings “Volar-e” but the European driver no “Cantar-e”

CLIMATE CHANGE FOCUS: Cutting emissions, one bog at a time

Haiti: ‘Laden with challenges’ but also hope, Mission chief tells Security Council

Will the European Court of Justice change data privacy laws to tackle terrorism?

‘Protracted crisis’ in Venezuela leads to ‘alarming escalation of tensions’: UN political chief

Global response to poverty and environmental goals ‘not ambitious enough’

“The Arctic climate matters: to what degree?”, a Sting Exclusive co-authored by UN Environment’s Jan Dusik and Slava Fetisov

“The winner is who can accelerate the transition to a new digital era”. The Sting reports live from EBS 2015: a Digital Europe 4.0

More Stings?

Advertising

Trackbacks

  1. […] Draghi hands over to banks €77.7 billion more […]

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s