32 replies on “Special Resolution Regime for Banks to be announced?”
It would be interesting to know if there was debate historically about implementing a scheme such as in place in the USA. Perhaps we just never thought our banks were in any danger until the end.
One would like to see the stats on how much money bondholders and depositors have lost in US banks in the last three years as a result of the US version of this scheme being implemented.
So the 64bn € question is can this legislation be used to impose losses down the capital structure during the current restructuring of the banks.
Certainly, there would seem to be no reason why it couldn’t be used to force debt for equity swaps on unguaranteed subordinated debt holders. In the meantime, we are stuck with the amended guarantee.
I think we are still impaled on the same dilemma that emerged following that fateful night in Sep. 2008: how to impose losses on some bond investors while ensuring that other bond investors continue to be willing to finance an enormous fiscal deficit? And the market for sovereign debt surely is entitled to question the economic governance of a country (and its ability to service future debt) that allowed its domestic banking system (via a BoG standard property bubble) to threaten the solvency of the state.
I fear this hinted at bank resolution legislation will be just another peice of sticking plaster designed to postpone the political and economic surgery required.
The signal must go out: wind down Anglo_Irish & INBS …. methinks, however, the Kleptocracy still in control of the agenda …
@zhou_enlai
As far as I know no sub-debt will be included in the new guarantee and we could always re-amend to exclude all old debt.
@D_E
Isn’t all old debt excluded, apart from anything issued under the guarantee (old and new)?
@ DE/YM
“sub-debt will be included in the new guarantee”
ALL old debt, senior & sub & deposit, is not covered after Sept 2010 by the new g’tee.
ONLY debt issued between 1st October 2008 (or whatever date it started) and 30th Sept 2010 will be covered by the new g’tee, until maturity or until 5yrs from initiation, whichever is earlier.
@Eoin
New dated sub debt, though, is still currently included, yes? (i.e. the undated sub debt that has been bought back using new dated sub debt) – this is a point of contention with the EU, I believe?
11. Eligible liabilities shall be any of the following liabilities:
11.1 deposits (to the extent not covered by deposit protection schemes in
the State (other than the CIFS Scheme) or any other jurisdiction);
11.2 senior unsecured certificates of deposit;
11.3 senior unsecured commercial paper;
11.4 other senior unsecured bonds and notes; and
11.5 other forms of senior unsecured debt which may be specified by the
Minister, consistent with EU State aid rules and the EU Commission’s
Banking Communication (2008/C 270/02) and subject to
prior consultation with the EU Commission,
12.1 An eligible liability:
(a) shall not have a maturity in excess of five (5) years; and
(b) must be incurred between the period from the commencement
date to and including 29 September 2010, subject to the
approval of the EU Commission at six (6) monthly intervals,
pursuant to paragraph 5 above. The Minister may amend the
issuance period by order under section 6(3B) of the Act and in
order to ensure compliance with EU State aid requirements.
@ YM
yes, included until 30th Sept 2010. No sub debt of any sort is covered after that.
So how much unguaranteed debt, of any type, will be outstanding in September
@Philip Lane
Thanks for the link. Hopefully the government can move quickly on it as it is a self-imposed handicap. The more money they can squeeze out of subordinate bondholders the less the public will have to put in/the banks will gouge out of them in the future. After passing the resolution legislation they should follow Lucey’s proposals as their current ones won’t work. NAMA should value the loans and then stop. It will have done some good and it can be given an honourable discharge.
UK legislation was introduced in late 2008 and passed in early 2009.
We could have cut and pasted it and passed it in 24 hours if we wished.
Why didnt we?
@Eoin
Ah yes, thanks. I’d forgotten the EU put the boot in on subordinate debt. They also reduced the scope, I think: http://www.irishtimes.com/newspaper/breaking/2009/1120/breaking72.html
“”The new guarantee excludes subordinated debt and extends to instruments with a maturity of up to five years. Previously, liabilities were covered until September 29th, 2010 maximum,” the Commission said in a statement.
“Secondly, the temporal scope of the scheme has been modified. The instruments guaranteed under the scheme may be issued from December 1st 2009 until June 1st 2010,” it added. “
@All
Governor Daniel K. Tarullo
Toward an Effective Resolution Regime for Large Financial Institutions
At the Symposium on Building the Financial System of the 21st Century, Armonk, New York
March 18, 2010
” First, any new regime should be used only in those rare circumstances where a firm’s failure would have serious adverse effects on financial stability. That is, the presumption should be that generally applicable bankruptcy law applies to nonbank financial firms–even large, interconnected ones. One way to help ensure that the regime is invoked only when necessary to protect the public’s interest in systemic stability is to use a “multi-key” approach–that is, one that requires the approval of multiple agencies and a determination by each that the high standards governing the use of the special regime have been met.
Second, once invoked, the government should have broad authority to wind down the company in an orderly way. This authority should include–among other things–selling assets, liabilities, or business units of the firm; transferring the systemically significant or viable operations of the firm to a new bridge entity that can continue these operations; and repudiating burdensome contracts of the firm, subject to appropriate conditions and compensation.
Third, there should be a clear expectation that the shareholders and creditors of the failing firm will bear losses to the fullest extent consistent with preserving financial stability. Shareholders of the firm ultimately are responsible for the organization’s management (or, more likely, mismanagement) and are supposed to be in a first-loss position upon failure of the firm. Shareholders, therefore, should pay the price for the firm’s failure and should not benefit from a government-managed resolution process. To promote market discipline on the part of the creditors of large, interconnected firms, unsecured creditors of the firms must also bear losses. Here is where the potential conflict of policy goals is obvious. While losses imposed on creditors will increase market discipline in the longer term, the immediate effect could be to provoke a run on other firms with broadly similar positions or business strategies. Thus the extent of these losses and the manner in which they are applied may need to depend on the facts of the individual case. At the very least, however, subordinated debt, or other financial interests that can qualify as regulatory capital, should be fully exposed to losses.
Fourth, the ultimate cost of any government assistance provided in the course of the resolution process to prevent severe disruptions to the financial system should be borne by the firm or the financial services industry, not by taxpayers.
The scope of financial institutions assessed for these purposes should be appropriately broad, reflecting that a wide range of financial institutions likely would benefit, directly or indirectly, from actions that avoid or mitigate threats to financial stability. However, because the largest and most interconnected firms likely would benefit the most, it seems appropriate that these firms should bear a proportionally larger share of any costs that cannot be recouped from the failing firm itself. To avoid pro-cyclical effects, such assessments should be collected over time. ”
“A colleague of Drumm’s, Matt Moran, the chief financial officer, also sent an email saying: “Project Maple — regulator conversation done and went fine.””
One must be careful what one says here.
If one accepts the efficacy of the alleged email, is one permitted to ask oneself the question?
“Did the regulator act with or without the knowledge of his Minister?”
Or. Did the regulator (at the time separate from the Central Bank) inform the Governor of the Central Bank of his (alleged, the regulators) approval?
These are the type of questions that haunt dreams.
@ Pat Donnelly,
“Some detail of AngloQuinn bank”
Indeed. Who is protecting whom? And why?
One thing seems certain.
The protection racket that is ongoing is going to cost the Citizen/Taxpayer north of €50bn.
Again I recommend you to Article 39 of the Constitution of Ireland.
@ Pat Donnelly,
“Just days before the bank lent €500m to 10 of its most highly-regarded clients to buy almost one-third of the stake controlled by Quinn, David Drumm, Anglo’s chief executive, sent an email to a colleague saying that the regulator was “squared”.”
Were they not also the most highly indebted?
@ Pat Donnelly,
“The Maple Project was designed to reduce businessman Sean Quinn’s financial interest in the bank. Quinn held 28% of Anglo Irish Bank through instruments known as contracts for difference.”
Tell me this Pat. Is it just my peasant serf understanding of English, or could one substitute the word “Conspiracy” for the word “Project”.
Sounds the same to me.
But then I’m just an Irish muck savage peasant serf.
Them that be makin de language knows I am thick.
@ Pat Donnelly,
“As far back as March 31, 2008, Anglo told the regulator that the share placing was to ensure “the market price of the company’s shares will not be destabilised”.”
Again one must be careful with language here. As Tammy Wynette said “Sometimes it’s hard to be a Woman”.
Could some of my betters here explain exactly why (if the Sunday Times allegation is true) the regulator saw fit to hinder price discovery on Anglo Irish Bank shares?
Eoin?
To help the bondholders (the insiders)? Give them enough time to get out of Dodge?
If the Sunday Times allegation is true, how many pensioners lost their retirement as a result of the failure of the regulator to allow price discovery ?
And if any of those pensioners were to meet Seanie Fitz or Paddy (the Regulator) Neary in the supermarket I hope Tesco/Dunnes/Lidl aren’t playing this.
“I Fall To Pieces Each Time I See You Again”
Greg
Yes, yes, yes and YES!
The auditors also have a paper trail for the gardai to pursue. They are meant to test for breaches of company law and the truth of the balance sheet. True, they always hide behind the watchdog and not a blood hound case over 100 years ago. But Arthur Andersen, the most aggressive of the auditors, had an injudicious email or two. If the Gardai continue their investigations, what will be found? Maybe they also know something about the Irish Crown Regalia?
This may help to assuage the feelings of those who have lost income as a result of the shenanigans. A steady diet of heads meeting cold steel may prevent Regicide……
“Conspiracy” is reserved for those who do not know their place, Greg.
Treason never prospers for if it doth, none dare call it treason.
This is how under-paid public servants become friendly with those who have the gold and make the rules. Lowly driminal types get the Circuit court or if they are violent, the SCC. The rich and powerful emasculated tribunals “with the full powers of the High Court” that cannot imprison or find guilt and that spread spondulicks far and wide.
The Gardai clearly could not be trusted to do the job? But it still takes BHO and the US press to push the arrest button.
@ Pat Donnelly,
“The Sunday Times has unearthed communications between Anglo and the regulator which show that intimate details of the bank proposal to regularise Quinn’s holding were shared with the authorities.”
Houston (or in this case the Constitution of the Irish Republic) “we’ve had a problem here”.
Swigert: ‘Okay, Houston, we’ve had a problem here.’
Duke: ‘This is Houston. Say again please.’
Lovell: ‘Houston, we’ve had a problem. We’ve had a main B bus undervolt.’
Authorities “sharing” “intimate details” to hinder price discovery”.
Again, and being very careful with language. How much damage was done to pensioners and pension funds (and Unit Trusts and UCITS) by this alleged intimate sharing?
Exactly how much financial damage was done if the alleged intimate sharing took place? €10bn / €20bn / €30bn?
Yes indeed we’ve had a problem here.
And it hasn’t gone away you know.
@ Pat Donnelly,
“This is how under-paid public servants become friendly with those who have the gold and make the rules.”
Then it is better that the under-paid public servants be unemployed.
They might discover freedom and not their servitude to self interest and greed.
Do they know they are vassals?
@ Pat Donnelly
“Conspiracy” is reserved for those who do not know their place, Greg.”
Let us hope that the Judiciary has not yet been “told its place”.
Time is running out on this nonsense. And Article 39 or otherwise someone outside this State is pulling the strings.
@ Pat Donnelly,
“The auditors also have a paper trail for the gardai to pursue.”
Indeed. Forgot to add Ernst & Young were also the auditors of Lehman Brothers.
So, as an ignorant peasant let me see if I “get” this.
Ernst & Young audited Anglo Irish Bank and audited Lehman Brothers, and now they are auditing NAMA.
“The defendants focused their efforts on trying to save their company and their jobs with little or no regard to how their egregious actions harmed those who in good faith invested in Lehman Brothers,’ said San Mateo County Counsel Michael Murphy.”
The UN grew out of WWII. With the coming chaos, making where we are now look like luxury, there will be a renewal of pledge to world government. This will not succeed if some of those involved in the pillage get their way. They have a lot of money which buys influence, but so have their opponents. It is like the difference between US economists and economists from the rest of the world. If they get it wrong, they have weakened the west for no good reason except to enable a possibility of revolt.
The rich will consider that they are safe. We shall see. Dual identity might be useful. I hear G W Bush bought up a large chunk of Paraguay. Just in case.
Even “success” by a world government will mean lots of police actions. Korea was a police action.
32 replies on “Special Resolution Regime for Banks to be announced?”
It would be interesting to know if there was debate historically about implementing a scheme such as in place in the USA. Perhaps we just never thought our banks were in any danger until the end.
One would like to see the stats on how much money bondholders and depositors have lost in US banks in the last three years as a result of the US version of this scheme being implemented.
So the 64bn € question is can this legislation be used to impose losses down the capital structure during the current restructuring of the banks.
Certainly, there would seem to be no reason why it couldn’t be used to force debt for equity swaps on unguaranteed subordinated debt holders. In the meantime, we are stuck with the amended guarantee.
I think we are still impaled on the same dilemma that emerged following that fateful night in Sep. 2008: how to impose losses on some bond investors while ensuring that other bond investors continue to be willing to finance an enormous fiscal deficit? And the market for sovereign debt surely is entitled to question the economic governance of a country (and its ability to service future debt) that allowed its domestic banking system (via a BoG standard property bubble) to threaten the solvency of the state.
I fear this hinted at bank resolution legislation will be just another peice of sticking plaster designed to postpone the political and economic surgery required.
@All
We had a wee chat on this previously –
http://www.irisheconomy.ie/index.php/2010/03/07/resolution-regime/
The signal must go out: wind down Anglo_Irish & INBS …. methinks, however, the Kleptocracy still in control of the agenda …
@zhou_enlai
As far as I know no sub-debt will be included in the new guarantee and we could always re-amend to exclude all old debt.
@D_E
Isn’t all old debt excluded, apart from anything issued under the guarantee (old and new)?
@ DE/YM
“sub-debt will be included in the new guarantee”
ALL old debt, senior & sub & deposit, is not covered after Sept 2010 by the new g’tee.
ONLY debt issued between 1st October 2008 (or whatever date it started) and 30th Sept 2010 will be covered by the new g’tee, until maturity or until 5yrs from initiation, whichever is earlier.
@Eoin
New dated sub debt, though, is still currently included, yes? (i.e. the undated sub debt that has been bought back using new dated sub debt) – this is a point of contention with the EU, I believe?
http://www.finance.gov.ie/documents/publications/statutoryinstruments/2009/si4902009.pdf
11. Eligible liabilities shall be any of the following liabilities:
11.1 deposits (to the extent not covered by deposit protection schemes in
the State (other than the CIFS Scheme) or any other jurisdiction);
11.2 senior unsecured certificates of deposit;
11.3 senior unsecured commercial paper;
11.4 other senior unsecured bonds and notes; and
11.5 other forms of senior unsecured debt which may be specified by the
Minister, consistent with EU State aid rules and the EU Commission’s
Banking Communication (2008/C 270/02) and subject to
prior consultation with the EU Commission,
12.1 An eligible liability:
(a) shall not have a maturity in excess of five (5) years; and
(b) must be incurred between the period from the commencement
date to and including 29 September 2010, subject to the
approval of the EU Commission at six (6) monthly intervals,
pursuant to paragraph 5 above. The Minister may amend the
issuance period by order under section 6(3B) of the Act and in
order to ensure compliance with EU State aid requirements.
@ YM
yes, included until 30th Sept 2010. No sub debt of any sort is covered after that.
So how much unguaranteed debt, of any type, will be outstanding in September
@Philip Lane
Thanks for the link. Hopefully the government can move quickly on it as it is a self-imposed handicap. The more money they can squeeze out of subordinate bondholders the less the public will have to put in/the banks will gouge out of them in the future. After passing the resolution legislation they should follow Lucey’s proposals as their current ones won’t work. NAMA should value the loans and then stop. It will have done some good and it can be given an honourable discharge.
UK legislation was introduced in late 2008 and passed in early 2009.
We could have cut and pasted it and passed it in 24 hours if we wished.
Why didnt we?
@Eoin
Ah yes, thanks. I’d forgotten the EU put the boot in on subordinate debt. They also reduced the scope, I think:
http://www.irishtimes.com/newspaper/breaking/2009/1120/breaking72.html
“”The new guarantee excludes subordinated debt and extends to instruments with a maturity of up to five years. Previously, liabilities were covered until September 29th, 2010 maximum,” the Commission said in a statement.
“Secondly, the temporal scope of the scheme has been modified. The instruments guaranteed under the scheme may be issued from December 1st 2009 until June 1st 2010,” it added. “
@All
Governor Daniel K. Tarullo
Toward an Effective Resolution Regime for Large Financial Institutions
At the Symposium on Building the Financial System of the 21st Century, Armonk, New York
March 18, 2010
http://www.federalreserve.gov/newsevents/speech/tarullo20100318a.pdf
” First, any new regime should be used only in those rare circumstances where a firm’s failure would have serious adverse effects on financial stability. That is, the presumption should be that generally applicable bankruptcy law applies to nonbank financial firms–even large, interconnected ones. One way to help ensure that the regime is invoked only when necessary to protect the public’s interest in systemic stability is to use a “multi-key” approach–that is, one that requires the approval of multiple agencies and a determination by each that the high standards governing the use of the special regime have been met.
Second, once invoked, the government should have broad authority to wind down the company in an orderly way. This authority should include–among other things–selling assets, liabilities, or business units of the firm; transferring the systemically significant or viable operations of the firm to a new bridge entity that can continue these operations; and repudiating burdensome contracts of the firm, subject to appropriate conditions and compensation.
Third, there should be a clear expectation that the shareholders and creditors of the failing firm will bear losses to the fullest extent consistent with preserving financial stability. Shareholders of the firm ultimately are responsible for the organization’s management (or, more likely, mismanagement) and are supposed to be in a first-loss position upon failure of the firm. Shareholders, therefore, should pay the price for the firm’s failure and should not benefit from a government-managed resolution process. To promote market discipline on the part of the creditors of large, interconnected firms, unsecured creditors of the firms must also bear losses. Here is where the potential conflict of policy goals is obvious. While losses imposed on creditors will increase market discipline in the longer term, the immediate effect could be to provoke a run on other firms with broadly similar positions or business strategies. Thus the extent of these losses and the manner in which they are applied may need to depend on the facts of the individual case. At the very least, however, subordinated debt, or other financial interests that can qualify as regulatory capital, should be fully exposed to losses.
Fourth, the ultimate cost of any government assistance provided in the course of the resolution process to prevent severe disruptions to the financial system should be borne by the firm or the financial services industry, not by taxpayers.
The scope of financial institutions assessed for these purposes should be appropriately broad, reflecting that a wide range of financial institutions likely would benefit, directly or indirectly, from actions that avoid or mitigate threats to financial stability. However, because the largest and most interconnected firms likely would benefit the most, it seems appropriate that these firms should bear a proportionally larger share of any costs that cannot be recouped from the failing firm itself. To avoid pro-cyclical effects, such assessments should be collected over time. ”
Quite!
http://www.timesonline.co.uk/tol/news/world/ireland/article7069824.ece
As predicted, documents exist! State sanctioned law breaking…….. brings me back to the DIRT whitewash!
DOD
Quite a find! Sadly, it is based on logic and not fantasy and there will be little opportunity for Ireland Inc to profit from such a plan.
http://www.timesonline.co.uk/tol/news/world/ireland/article7069681.ece
Some detail of AngloQuinn bank
@ Pat Donnelly,
“A colleague of Drumm’s, Matt Moran, the chief financial officer, also sent an email saying: “Project Maple — regulator conversation done and went fine.””
One must be careful what one says here.
If one accepts the efficacy of the alleged email, is one permitted to ask oneself the question?
“Did the regulator act with or without the knowledge of his Minister?”
Or. Did the regulator (at the time separate from the Central Bank) inform the Governor of the Central Bank of his (alleged, the regulators) approval?
These are the type of questions that haunt dreams.
@ Pat Donnelly,
“Some detail of AngloQuinn bank”
Indeed. Who is protecting whom? And why?
One thing seems certain.
The protection racket that is ongoing is going to cost the Citizen/Taxpayer north of €50bn.
Again I recommend you to Article 39 of the Constitution of Ireland.
@ Pat Donnelly,
“Just days before the bank lent €500m to 10 of its most highly-regarded clients to buy almost one-third of the stake controlled by Quinn, David Drumm, Anglo’s chief executive, sent an email to a colleague saying that the regulator was “squared”.”
Were they not also the most highly indebted?
@ Pat Donnelly,
“The Maple Project was designed to reduce businessman Sean Quinn’s financial interest in the bank. Quinn held 28% of Anglo Irish Bank through instruments known as contracts for difference.”
Tell me this Pat. Is it just my peasant serf understanding of English, or could one substitute the word “Conspiracy” for the word “Project”.
Sounds the same to me.
But then I’m just an Irish muck savage peasant serf.
Them that be makin de language knows I am thick.
@ Pat Donnelly,
“As far back as March 31, 2008, Anglo told the regulator that the share placing was to ensure “the market price of the company’s shares will not be destabilised”.”
Again one must be careful with language here. As Tammy Wynette said “Sometimes it’s hard to be a Woman”.
http://www.youtube.com/watch?v=tc5iiDKSsYM
Well sometimes it’s hard to be a peasant serf.
Could some of my betters here explain exactly why (if the Sunday Times allegation is true) the regulator saw fit to hinder price discovery on Anglo Irish Bank shares?
Eoin?
To help the bondholders (the insiders)? Give them enough time to get out of Dodge?
If the Sunday Times allegation is true, how many pensioners lost their retirement as a result of the failure of the regulator to allow price discovery ?
And if any of those pensioners were to meet Seanie Fitz or Paddy (the Regulator) Neary in the supermarket I hope Tesco/Dunnes/Lidl aren’t playing this.
“I Fall To Pieces Each Time I See You Again”
Greg
Yes, yes, yes and YES!
The auditors also have a paper trail for the gardai to pursue. They are meant to test for breaches of company law and the truth of the balance sheet. True, they always hide behind the watchdog and not a blood hound case over 100 years ago. But Arthur Andersen, the most aggressive of the auditors, had an injudicious email or two. If the Gardai continue their investigations, what will be found? Maybe they also know something about the Irish Crown Regalia?
This may help to assuage the feelings of those who have lost income as a result of the shenanigans. A steady diet of heads meeting cold steel may prevent Regicide……
“Conspiracy” is reserved for those who do not know their place, Greg.
Treason never prospers for if it doth, none dare call it treason.
This is how under-paid public servants become friendly with those who have the gold and make the rules. Lowly driminal types get the Circuit court or if they are violent, the SCC. The rich and powerful emasculated tribunals “with the full powers of the High Court” that cannot imprison or find guilt and that spread spondulicks far and wide.
The Gardai clearly could not be trusted to do the job? But it still takes BHO and the US press to push the arrest button.
@ Pat Donnelly,
“The Sunday Times has unearthed communications between Anglo and the regulator which show that intimate details of the bank proposal to regularise Quinn’s holding were shared with the authorities.”
Houston (or in this case the Constitution of the Irish Republic) “we’ve had a problem here”.
Swigert: ‘Okay, Houston, we’ve had a problem here.’
Duke: ‘This is Houston. Say again please.’
Lovell: ‘Houston, we’ve had a problem. We’ve had a main B bus undervolt.’
Authorities “sharing” “intimate details” to hinder price discovery”.
Again, and being very careful with language. How much damage was done to pensioners and pension funds (and Unit Trusts and UCITS) by this alleged intimate sharing?
Exactly how much financial damage was done if the alleged intimate sharing took place? €10bn / €20bn / €30bn?
Yes indeed we’ve had a problem here.
And it hasn’t gone away you know.
@ Pat Donnelly,
“This is how under-paid public servants become friendly with those who have the gold and make the rules.”
Then it is better that the under-paid public servants be unemployed.
They might discover freedom and not their servitude to self interest and greed.
Do they know they are vassals?
@ Pat Donnelly
“Conspiracy” is reserved for those who do not know their place, Greg.”
Let us hope that the Judiciary has not yet been “told its place”.
Time is running out on this nonsense. And Article 39 or otherwise someone outside this State is pulling the strings.
@ Pat Donnelly,
“The auditors also have a paper trail for the gardai to pursue.”
Indeed. Forgot to add Ernst & Young were also the auditors of Lehman Brothers.
So, as an ignorant peasant let me see if I “get” this.
Ernst & Young audited Anglo Irish Bank and audited Lehman Brothers, and now they are auditing NAMA.
Is this supposed to make me feel good?
http://www.youtube.com/watch?v=Y7Z56dxeGMA
“The defendants focused their efforts on trying to save their company and their jobs with little or no regard to how their egregious actions harmed those who in good faith invested in Lehman Brothers,’ said San Mateo County Counsel Michael Murphy.”
http://www.accountancyage.com/accountancyage/news/2230536/y-sued-lehman-audit
The UN grew out of WWII. With the coming chaos, making where we are now look like luxury, there will be a renewal of pledge to world government. This will not succeed if some of those involved in the pillage get their way. They have a lot of money which buys influence, but so have their opponents. It is like the difference between US economists and economists from the rest of the world. If they get it wrong, they have weakened the west for no good reason except to enable a possibility of revolt.
The rich will consider that they are safe. We shall see. Dual identity might be useful. I hear G W Bush bought up a large chunk of Paraguay. Just in case.
Even “success” by a world government will mean lots of police actions. Korea was a police action.
http://globaleconomicanalysis.blogspot.com/2010/03/kansas-city-feds-hoenig-endorses.html
Problems in the USA may mean scarce capital becomes more scarce. Interest rates anyone?
Good link Pat – especially like the clarity in:
“Regulation has done everything but what it should have done.”