Ajay Chopra’s Kenmare Address

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Thanks to Patrick at Dublin Chamber of Commerce, here is a link to Mr Chopra’s address tonight at DEW Kenmare.

Click here to listen to the talk, it’s about 30 minutes long.

Here’s the text of the speech from the IMF.

And in other news, we may have another solution to Ireland’s economic crisis that takes full account of our constrained funding position.

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93 Responses to “Ajay Chopra’s Kenmare Address”

  1. hoganmahew Says:

    “Establishing a common approach to the banking system within the single market is a critical element of the vision of how the euro area and the EU ought to function in the future.”

    “EU-wide deposit insurance scheme ”
    “Common bank crisis management and resolution regime”
    “A new EU supervisory regime for cross-border groups”

    *whistles tunelessly while kicking a can down the road wondering why we are still at the stage of discussing these ideas*

  2. The Dork of Cork Says:

    NO FAITH – I have read the good book and interpreted it differently – my local priest tells me I am but a peasant which is very true but my outlook has changed……………….& cannot help myself.
    Why should I give my coin to a church that I no longer have faith in ?

    Must I still listen to priests who speak from pulpits in the interest of village stability ?
    Many people are in a quandary – they know that “growth” as defined by our betters is no such thing.
    30 + years of negative growth – lower GDP relative to M3 growth is not growth.
    Something must be wrong in distant Rome…………….
    But before I make my pilgrimage , I must sink some pints of Beamish & ponder this great flux in our common belief systems………….

  3. Ceterisparibus Says:

    AJ is a waffler ( the language of our former esteemed leader). To quote the hedge fund guy in the Michael Lewis book…there will be monkeys flying out my a**e..before we see a federal European governing body.

    Even Enda does not like the idea of Lisbon 3.

  4. Al Says:

    Whats the exact opposite of Homeopathy???
    Its what we did, isnt it?

  5. The Dork of Cork Says:

    A lot more central authorities – these guys want to make everything so complex…… capital buffers , Basel , Blah Blah Blah – predictable priest.
    Keep it simple stupid – if you believe in rational leverage – its just credit multiplied over goverment debt.
    This has been proven over the last 4 years.
    Credit deposits just net to zero – it ain’t capital baby.
    Now I must Drink.

  6. grumpy Says:

    Chopra’s Kenmare address will be of most interest to the shining examples of Irish efficiency that lost his luggage.

  7. Robert Browne Says:

    @ hoganmahew

    “whistles tunelessly while kicking a can down the road wondering why we are still at the stage of discussing these ideas”. A good description.

    Little does he seem to realise that he is whistling past the grave yard. These thoughts amount to nothing more than if only we had acted sooner. maybe Francis Bacon had an explanation;

    “Men of age object too much, consult too long, adventure too little and repent to soon and seldom drive business home to the full period, but content themselves with a mediocrity of success”.

    In this case however the ‘mediocrity of success’ is not enough to stop it becoming the dissolution of the whole European project.

  8. DOCM Says:

    @ All

    I re-post below my contribution on the other thread (with the error regarding the date the Federal Reserve came into existence corrected).

    @ Ceterisparibus

    Thanks for the link. The speech by AJ Chopra is quite brilliant. Two extracts, however, immediately caught my eye.

    “More generally, the international regulatory community will need to examine the appropriate treatment of risk classes that have traditionally been regarded as low or zero risk”.

    One might quote the ESBies paper in reply.

    “Bank regulators following the Basel criteria gave sovereign bonds held by national banks a risk less assessment in calculating capital requirements, even as insuring against the default of some sovereign bonds using credit default swaps cost more than 5% today”.

    This game of pretence has to stop.

    The second key element is the following extract:

    “These proposals [on eurobonds and safe bonds] should be assessed along two dimensions. First, they must provide financing to euro area sovereigns at reasonable interest rates without creating distortions such as moral hazard and expectations of bailouts. Second, the reform must be feasible under potentially severe political constraints. Transitional issues from the current system with national sovereign bonds to a common bond should not be overlooked, including how to adjust sovereign risk weights of bank capital buffers.

    These proposals for pooling of risks make the need for fiscal governance even stronger. Strong fiscal frameworks must be in place at national levels to guarantee fiscal sustainability. This may require some delegation of sovereignty to a federal entity. The new framework could also require alternative mechanisms of ex-ante risk sharing such as those that are prominent in other federal states such as the U.S. or Germany”.

    I do not think that the last point is either true or politically feasible. In a federal states such as the US and Germany, maybe! But the EU is not about to become such a state and any attempts to create it are likely to end very, very badly.

    Again, one must turn to the ESBies paper.

    “..how can value be created by just re-packaging bonds? The answer to these questions is that eliminating the distortions brought about by bad regulation creates value”.

    As an example of bad regulation, the one I mention above could hardly be bettered.

    As I have also pointed out in respect of the Winkler paper, the US was for many years a federal state without a central bank (the Federal Reserve came into existence in 1913). The EU is the opposite and is likely to remain so. The means to make this work can be found and they are largely set out in the paper including the reference to “transitional issues” in the extract above.

    P.S. RTE’s coverage of the speech was very poor. The issue of possible substantive treaty change will arise as a consequence of what is agreed not as as a precondition for it (or what the participants in the Kenmare boondoggle think of it). In any case, this is not a matter for the IMF but the member States of the EU. That there is little enthusiasm for such an undertaking would be an understatement, not least across the Irish Sea. cf. a link to the FCO explanation of why a referendum is not necessary for the change already agreed; that to Article 136 TFEU, to allow for the establishment of the ESM.


    The UK is, of course, not commenting on the substance of the proposed change, simply stating that its recently adopted national legislation means that it is not impacted by it. That is a heroic assumption.

  9. DOCM Says:

    @ All



  10. paul quigley Says:

    ‘A weaker sovereign, in turn, damages the capital position of banks, which creates the risk of dangerous bank runs. These vicious feedback loops that can lead to a crippling downward spiral are painfully evident here in Ireland’

    I note the word ‘are’. It will be a while before the Pillars ‘transition’ off the ECB tit.

  11. Joseph Ryan Says:

    Excellent contribution.

    What a pity Mr AJ Chopra was not head of the ECB instead of Mr Trichet.

    He seems to understand how a banking system should work.
    He has all the elements.
    And he knows depositors are the key to bank funding.

    I really like the FAT tax.

  12. Mickey Hickey Says:

    An interesting newspaper article by a regular (non economist/business/financial) reporter.


  13. Ceterisparibus Says:

    @Paul Quigley
    They have lots of old Pillars in Greece.

  14. Ceterisparibus Says:

    @Mickey Hickey
    Good article.
    Liked this bit….
    “According to the laureates’ theories, they’ll do whatever’s most beneficial to them, and they’ll do it every time. They don’t need governments to instruct them; they figure it out for themselves. Economists call this the “rational expectations” model.”

    Simple..that’s why the deposits have moved abroad. Paddy is no thick.

  15. Georg Baumann Says:

    Chopra: The crisis requires convincing skeptical markets that Europe can make bold and unified decisions.

    On the contrary, this global heist requires to shut down these markets!

    To disembowel the Banks and mathematized Harvard priest that preach the cult of the necrophiliac resurrection of a past failure.

    Push the button, press delete.

    The political alternatives developing otherwise are very dangerous and devastating, the EU Commission in particular is evidence about it, working hard to dismantle every democratic foundation to be substituted by their own totalitarian leadership.

  16. The Dork of Cork Says:

    Yee guys just want another church to run too – pathetic , grow up – he is merely playing to a congregation.
    CEBTRALISATION OF POWER MEANS WE HAVE LESS INPUT – distant spires means more potential for corruption.
    The lesson of the reformation means wealth creation must be more organic – the CBs and other international credit organisations are reinventing themselves as the new Rome after the fall of the official empire.
    So predictable really…………………….

  17. The Dork of Cork Says:

    The CBs have become what they have fought – maybe we were better off under the control of the first multinational corporation – at least the oringinal outfit was uncomfortable with usury.

  18. Gavin Kostick Says:

    @ Stephen Kinsella

    With regard to alternative solutions, this from the US Congress, via America’s Finest News Source.


  19. Gavin Kostick Says:

    From the speech, just after halfway, as AJ Copra talks about the Bank resolution part of his interconnected proposals.

    “The Commission proposals are not sufficiently ambitious….

    …the aim should be to have a common back-stop at the EU level, that ends the needs for national financing…

    …when a bank fails the costs should not be bourne on the tax-payer of the home country.”

  20. David O'Donnell Says:


    “Ideology also played a role. There was a belief that “light-touch” regulation and market discipline would suffice to ensure efficient and stable financial markets. The crisis proved this belief was wrong. Mechanisms of self-regulation and market discipline—such as corporate governance, internal risk management, private audits, and discipline by creditors—failed to prevent the build-up of risk. Market players also anticipated bailouts of “too big to fail” institutions. In addition, in many countries including Ireland, authorities wrongly considered that macroeconomic risks and unsound bank behavior were not sufficiently alarming to require assertive policy responses.”

    +1 Costly stuff – that ideology!

  21. Stephen Kinsella Says:

    @Gavin, excellent link, thanks!

  22. Georg Baumann Says:

    What we witnessed was the unilateral breach of a social contract.

    It was a one sided activity, without the peoples involvement.

    This contract was the social consent, the invisible barrier past which nothing but anarchy, destruction or totalitarianism are the dark Lords that rule. Those who do not connect the dots of geo strategic aspects, oil and war to the events unfolding speak with the intention of a forked tongue, or are not educated enough to understand the context.

  23. Georg Baumann Says:

    Greece was refused membership in the Euro for they failed to meet criteria.

    Goldman Sachs succeeded to install this Achilles heel phenomenon and Greece joined the EMU….

    The reason that savings were attractive in dollars was mainly to be seen for it’s oil based stability.

    Hussein starts selling oil in Euro.

    UNITED NATIONS (Reuters)Members of the Security Council’s Iraqi sanctions committee said the panel’s chairman, Dutch Ambassador Peter van Walsum, would inform U.N. officials on Tuesday of the decision to allow Iraq to receive payments in euros, rather than dollars.

    Three years later, Saddam Hussein was captured, Iraq was devastated, and Halliburton and others stood ready to reap the rewards of the unjust attack on Iraq.

    Iran opens the IOB, Iranian oil bourse and sells mainly in Euro and Yen.

    (AP) Iran, OPEC’s second-largest producer, has completely stopped conducting oil transactions in U.S. dollars.“The dollar has totally been removed from Iran’s oil transactions,” Oil Ministry official Hojjatollah Ghanimifard told state-run television Wednesday. “We have agreed with all of our crude oil customers to do our transactions in non-dollar currencies.”
    in either euros or yen.

    “In Europe, Iran’s oil is sold in euros, but both euros and yen are paid for Iranian crude in Asia,” said Ghanimifard.

    Last year USA sold weapon systems, according to SIPRI in Stockholm the single largest weapons deal ever, for 75 billion USD to the Saudis.

    The latest news concerning Iran are somewhat fitting this picture.

  24. hoganmahew Says:

    @Robert Browne
    “In this case however the ‘mediocrity of success’ is not enough to stop it becoming the dissolution of the whole European project.”
    I agree with your analysis of the flaws, but I think it is still too early to forsee the dissolution of Europe. Rather I think it is a case of “having exhausted all other possibilities, the europeans eventually do the right thing”. The problem for me is that it is expensive, inefficient, and damaging to wait so long.

  25. hoganmahew Says:

    Speaking of the Onion and with reference to the economic history thread: http://www.theonion.com/articles/historians-politely-remind-nation-to-check-whats-h,26183/

  26. Ceterisparibus Says:

    Unless his numbers are widely off the mark Peter Matthews paints a daunting picture of the sustainability of our debt load. Reality bites.


  27. DOCM Says:

    @ Paul Quigley

    The point that you make is the central one. But it is an issue that goes well beyond Ireland’s situation. The question raised is whether this negative loop between banks and sovereigns is a major construction flaw in the euro. The evidence suggests overwhelmingly at this stage that it is.

    Whether and how this problem is resolved in the coming week is the key consideration for Europ’es future and, indeed the health of the world economy.

    By the way, on re-reading the speech, it seems to me that the placing of the section dealing with the possibility of euro or safe bonds, and especially the reference to that explosive word in a European political context – federal – marks a clear division between what is required now and what may be required in the distant future.

    Not that this will stop the treaty amendment bandwagon. It is too politically advantageous cf. Der Spiegel.


    However, the real world does keep intruding.


    And, of course, history does not stand still.


  28. The Dork of Cork Says:

    Even if we had Japanese overall debt levels – because our Goverment cannot default on credit deposits and cannot defecit spend with any independence we are in a much worse position.

    “budget deficits, by definition, are equivalent to adding net financial assets to the private sector; whereas budget surpluses remove financial assets from the private sector. This is represented by the identity: (G-T) = (S-I) – NX (G is government spending, T is taxes, S is savings, I is investment and NX is net exports). It is important to note that this identity is not unique to Modern Monetary Theory; it is an identity used throughout all macroeconomic theories, because it is true by definition.”

    Given the fact that Ireland is now running a current account surplus – it should raise the goverment money supply and use taxes to cut imports.
    This reducing the money supply & increasing taxes thingy is economic suicide – if a increase in the money supply can also make more sustainable development possible this will further reduce imports.

    The ECB caveman economics of starving or ejecting the populace so that they can get into surplus is very mid 19th century thinking…….

    Even our rational developments during the boom (I believe the Elysian tower was a good investment) will depreciate unless you introduce money into the medium to stimulate commerce.

  29. hoganmahew Says:

    Constantin Gurdgiev is in cracking good ascerbic form on the latest non-event conference on the eurozone banking crisis: http://trueeconomics.blogspot.com/2011/10/16102011-hot-air-balloon-of-g20-summits.html

    The solution being contemplated appears to be to jawbone market participants into believing that it is a sovereign crisis (but not in France), that the EFSF will sort that out and that there’s nothing to see in the banks at all.

    Mr. Chopra’s recommendations would provide some of the tools required to deal with the last and current crisis. They don’t pretend to deal with the next one – what will it be?

  30. The Dork of Cork Says:

    Olli is my favourite European Cardinal – he projects a awe inspiring sense of Boredom with pretty much everything.
    I think he projects & amplifies the Finnish Stereotype for some strange Euro poltical reasons.
    About Finnish parallels……………….”I’m, usually quite cautious about providing lessons from one unique experience to another unique experience……….. – cut the fiscal defecit … & the classic putting the fiscal house in order.”
    Theres certainly a lot of unique experiences out there Oli – all related to criminal banks credit opium production for some funny reason – and yet first “we must put the fiscal house in order” then we can forget about criminal credit events until the next criminal credit event is upon us.

    This classic is from last years loss of sovereignty fig leaf drama.

    If you somehow can manage to stay awake long enough when listening to dear Oli – you realize the Euro Dream is a nightmare populated by a den of vipers – theres no easy way out I am afraid , but we must somehow break from these sleepy sneaky snakes.

    Ever wonder what really goes on in these Elite / G 20 meetings ??????????


  31. The Dork of Cork Says:

    Someone is very upset – these subversive attempts at cultural & economic assimilation must stop.


  32. DOCM Says:

    @ All

    Would all small open economists step to the front of the class, please! Wolfgang Munchau would like to speak to them.


  33. Desmond Brennan Says:

    When I contrast Ajai Chopra’s clarion speech, with the cacophonous protectionist drivel that issues from Europe – I’m yet again reminded of the error of the IMF being pwned, and relegated to ‘partnership’ with the other two members of the ‘Troika’.

    The IMF’s job is to deal with politicians blustering specious nonsense – and the ECB and EC were at times overtly political, and tied agents of the Merkel-Sarkozy axis of fudge.

    The IMF need a new PR guy…and to lose the ‘troika’ tag. The IMF are the sherifs of last resort, and should remain somewhat aloof.

  34. Ceterisparibus Says:

    Thanks for the link.
    It’s refreshing to see someone telling it as it is. Where are our journalists?

    This bit struck me as being particularly apt…..
    “And then there’s that “lasting” bit. Per report: “The [G20] communique urged the euro zone “to maximize the impact of the EFSF (bailout fund) in order to address contagion”. EU officials said the most likely option was to use the 440 billion euro [EFSF] fund to offer partial loss insurance to buyers of stressed member states’ bonds in a bid to stabilize the market.” Now, give it a thought. A ‘lasting’ package of ‘solutions’ will use temporary guarantees to buyers of distressed debt?! This begs two questions: (1) How on earth will such use of EFSF address the main problem faced by over-indebted nations, namely the problem of unsustainable debts? Guarantees will not reduce Greek, Portuguese, Irish, Italian and Spanish debts to sustainable levels. (2) If EFSF were to remain a €440bn fund, how can the said amount be sufficient to provide already-committed sovereign financing backstop through 2015-2017, supply funds for banks recapitalizations to cover the shortfalls on sovereign funding, provide additional backstop funds for the sovereign deficits in the future, and underwrite a new tranche of CDS-styled insurance contracts that will have to cover ALL of the debt issuance by the distressed sovereigns? Note: it will require to provide cover for all debt, not just maturities-specific issues in order for it to be meaningful and prevent massive amplification of upward sloping yield curve, leading to potential front-loading of new debt by the distressed states and the resulting dramatic rise in maturity mismatch risks.”

  35. DOCM Says:

    @ All

    The more one reads the speech by Chopra, the more one is struck by its depth and breadth of coverage. Merkel. in her usual manner, is trying to exercise her authority in the most ham-fisted way imaginable, insisting on the introduction of a financial transaction tax the acceptance of which at a global level is ruled out by her own finance minister. Any attempt to introduce it at the level of the euro area would split the EU irrevocably. Chopra, with his suggestion of the introduction of a FAT outlines how the financial sector in Europe might, in fact, finance its own salvation.

    “A pan EU- deposit guarantee scheme could be pre-funded by a harmonized bank levy on selected bank liabilities or a financial activity tax (FAT). A FAT, where the base is the sum of profits and remuneration paid by banks, comes close to mimicking a VAT on financial services. A financial transaction tax, as recently proposed by the Commission, would be less attractive because of its potential distortionary effects and scope for evasion”.

    The German press is reporting that Ackermann is now actively negotiating on behalf of the banks involved (he chairs the euphemistically named Institute of International Finance) in relation to increasing the Greek haircut.

    Schaeuble is also quoted as accepting the need to increase the effectiveness of the EFSF but without stipulating how other than excluding the involvement of the ECB (which would preclude giving the EFSF a banking licence which would reveal to the rest of the world that the governments of the over-indebted euro area have turned into banks trying to stop runs on their respective exchequers).

  36. grumpy Says:

    @ceteris, hogan

    “Now, give it a thought. A ‘lasting’ package of ‘solutions’ will use temporary guarantees to buyers of distressed debt?!”

    You have to understand the psychology here. That is: fundamentally there is no real problem (except the recent acknowledgement that this does not apply to Greece). What is going on is that investors fear that prices of bonds may fall and are panicking irrationally. A temporary means to convince investors that the authorities can manipulate the market to prevent such falls therefore removes the anticipation of them and the irrational panic. Job done.

    It is classic Lorenzo BS.

  37. Ceterisparibus Says:


    So just panic anyway. To be sure to be shure.

  38. Ceterisparibus Says:

    This FAT tax has merit, particularly if you have ever been obliged to sit beside a fat person on a flight across the Atlantic. I think it was a professor out in Loughlinstown who suggested it first.

  39. hoganmahew Says:

    @grumpy, ceterisparibus, DOCM
    “It is classic Lorenzo BS.”
    It is worser den dat. If it was Central Bank piffle, it could be dismissed as a negotiating position/ideological bias/the irrational ravings of a lunatic who sees the world through dame edna spectacles gifted to him by the fairies in the depths of the stacks (who happens to be in charge of the second most powerful institution in the world).

    Sadly there is a political groupthink going on – “if we don’t cost our own state anything out of this, and preserve x/y/z, we’ll get re-elected”. It is common across all member states. It explains FF’s guarantee. It explains the Green’s acquiesence to it and to the scam that is NAMA that followed. It explains M. Sarkozy’s unwillingness to force equity on the French banks and lose France’s AAA rating and Frau Merkel and Herr Schauble’s unwillingness to admit that the German banking model is broken well beyond what was revealed by HRE, that the German export model (at least within Europe) is broken and that Germany is risking (hah!) impoverishing its neighbours.

    Get us to after the re-election. Then we can do something. It’s no coincidence that the ESM was supposed to come in in 2013 – after the two key elections. By then it would either be early enough in a term of office to be survivable or somebody else’s problem and there would be the election after that. So the Hail Mary passes continue… http://www.youtube.com/watch?v=1FuC3jnm4TE

  40. hoganmahew Says:

    The FAT tax is certainly an improvement on a simple tax on liabilities. It taxes the right people, IMO and prevents funding gaming – through off-balance vehicles with short-term flows from dark pools.

  41. DOCM Says:

    @ hoganmayhew

    It was ever thus! The EU is an organisation of sovereign states that defend their interests but they must do do so within recognised treaty parameters if the organisation is to survive. This Merkel, with Sarkozy a willing if unequal accomplice, has been singularly failing to do. In my view, her influence is rapidly falling and a solution will emerge this week not because it is a popular one but because it provides the lowest common denominator for all concerned. The “Merkel method” has had its day.

    Some language on treaty change will be found. But it will be no more than a fig leaf. It is the banking system in Europe – and, indeed, in the US – that is broken, not that of the states. It is in the power of the states to fix the banking system. It will bring them all down if they do not.

    What was missing over the past decade is now in place. The market has woken up to the disparity of sovereign risks and the fiction that it has been living. It is not the New Normal but the return of the Old Normal. Yields for the various countries are back where they were before the euro come into existence. This is what will make the new SGP work. Not some pursuit of an unnecessary and unattainable fiscal union.

  42. Eureka Says:

    Will the British bail out RBS? No?
    Will the French bail out SocGen? Yes?
    Round 2 is beginning

  43. grumpy Says:


    “It is in the power of the states to fix the banking system”

    What do you mean, ‘fix’?

    Those of us who were familiar with banking decades ago find the recent embodiment an obscenity. If by ‘fix’, you mean slosh in oodles more capital to let the games continue, then I don’t think you are using the right word.

    “What was missing over the past decade is now in place. The market has woken up to the disparity of sovereign risks and the fiction that it has been living. It is not the New Normal but the return of the Old Normal. Yields for the various countries are back where they were before the euro come into existence.”

    Yes and no. Don’t forget that there was both yield required to compensate for the perceived risk of default / devaluation (and that has been rediscovered), but there was also a yield component that reflected inflation expectations – these have gone into hiding. sooner (contrarian) or later (consensus) they will reappear. When they do the debt dynamics of some countries will be affected.

  44. hoganmahew Says:

    You are missing a crucial point with your ‘fix’ – Herr Schauble gets it and I believe M. Sarkozy does too – you cannot have a bank with a higher rating than its sovereign. We’ve seen that sovereign downgrades don’t necessarily matter to sovereign funding costs, but they do matter to bank funding costs or rather to bank collateral requirements. Derivative collateral is based on rating.

    Hence the continued attempts at a solution that involves no cost to the states. For banks that may be in trouble if they are not bailed out, but which will probably be deeply insolvent if they are bailed out by their states.

  45. Shay Begorrah Says:

    I hate to say this about a 3300 word essay but it is definitely worth a read, quite radical in its own way, and with only one short paragraph devoted to national fiscal discipline it is basically a long attack on the financial sectors incredible consequence free torching of the Eurozone.

    It is unfortunate that the French government tried to repurpose the Tobin tax as a financial system insurance tax when it is a worthy proposal with a useful goal outside of revenue generation – trying to reduce socially useless automated trading strategies, calming markets in general and rewarding investment strategies based on actual economic analysis versus market analysis.

    Now all you need is an equivalent of the EIB that funds strategically useful pan-European projects after the European Commission produces a set of priorities that the parliament can in good conscience approve.


    Some language on treaty change will be found. But it will be no more than a fig leaf. It is the banking system in Europe – and, indeed, in the US – that is broken, not that of the states. It is in the power of the states to fix the banking system. It will bring them all down if they do not.


    Amen. It is a world gone sane.

  46. grumpy Says:

    @Shay b

    “trying to reduce socially useless automated trading strategies, calming markets in general and rewarding investment strategies based on actual economic analysis versus market analysis.”

    The almost free capacity of liquiditied-up investment banks and the like, to job about at great speed and with vast numbers of effectively false trades has imho led to false markets, false directional moves, and undermined the role of markets as leading indicators.

    It isn’t so much “market analysis” imo that is the problem, it is the over-use of technical and behavioural analysis, in which the main concentration of analysis is towards the likely behaviour of other market participants. Adding cost to trades would be a good idea.

  47. Shay Begorrah Says:


    It isn’t so much “market analysis” imo that is the problem, it is the over-use of technical and behavioural analysis, in which the main concentration of analysis is towards the likely behaviour of other market participants. Adding cost to trades would be a good idea

    I used the wrong formulation there when I said “market analysis”, I mean the same thing as yourself (market humour prediction?), but the very idea that there exist economic fundamentals not currently captured by market prices is very non-neoclassical (the map is the territory!) and hence restricted to bongo players, MMTers and fuddy duddys. The strong version of the EMH has done a lot of damage.

    The naysayers to a transaction tax can of course convincingly argue that the current free movement of capital can not be undone and taxing trades would simply move them to another market but I can not help thinking that there is some form of transaction taxation and legislative legerdemain that could make it spread. The purpose after all is not simply getting the revenue, taxes for trades between Tobin/non Tobin jurisdictions could be split with the non Tobin jurisdiction having the option of simply returning the money to the market participant or putting it somewhere safe for a while….

    The US might not feel like being the first one to implement a Tobin-alike tax, but if the money started to come in the temptation to follow suit might be high.

  48. hoganmahew Says:

    “It is the banking system in Europe – and, indeed, in the US – that is broken, not that of the states.”
    Erm, no. It’s the states. The state is supposed to be in control, instead it is bought. All else follows from broken states running broken ideologies. At heart, financial and economic deregulation are political actions.

  49. Shay Begorrah Says:


    The state is supposed to be in control, instead it is bought. All else follows from broken states running broken ideologies. At heart, financial and economic deregulation are political actions.

    While few here would disagree that dubious ideological drives in politics and shortcomings in governance all but guaranteed we ended up in this trap lets not underplay the agency of the financial system in setting it.

    Financial and economic deregulation did not just happen as a result of failures in the public sphere, it was very heavily lobbied for by the financial industry itself (not to mention multinational corporations or “capital” in general) and as can be seen by the manoeuvrings of Ackerman et al. the financial sector is still unapologetically involved in fighting for its right to do, well, whatever the hell it wants.

    Without arguing for the sake of it we might need to neuter the financial sector before we can rebuild the system of government and economy.

    As an amusing aside/terrifying illustration of just how total the failure of banking has been Yanis Varoufakis pointed out a story that was new to me about how the very same DB’s gambling on gambling has has developed not necessarily to the banks advantage:

    From the FT: Deutsche Bank’s casinos exposure hits $4.9bn

  50. hoganmahew Says:

    “Financial and economic deregulation did not just happen as a result of failures in the public sphere, it was very heavily lobbied for by the financial industry itself (not to mention multinational corporations or “capital” in general) and as can be seen by the manoeuvrings of Ackerman et al. the financial sector is still unapologetically involved in fighting for its right to do, well, whatever the hell it wants.”
    Er, rather making my argument for me there… the financial industry had to lobby for change and deregulation. It was politicians that gave in to them…

  51. David O'Donnell Says:


    Some context for Kenmare …

    Let’s take a different tack. To understand the incomprehensible scope of the German inflation maybe it’s best to start with something basic….like a loaf of bread. (To keep things simple we’ll substitute dollars and cents in place of marks and pfennigs. You’ll get the picture.) In the middle of 1914, just before the war, a one pound loaf of bread cost 13 cents. Two years later it was 19 cents. Two years more and it sold for 22 cents. By 1919 it was 26 cents. [Double in value, or a "mere" 12% compound inflation –JM.] Now the fun begins.

    In 1920, a loaf of bread soared to $1.20, and then in 1921 it hit $1.35. By the middle of 1922 it was $3.50. At the start of 1923 it rocketed to $700 a loaf. Five months later a loaf went for $1200. By September it was $2 million. A month later it was $670 million (wide spread rioting broke out). The next month it hit $3 billion. By mid month it was $100 billion. Then it all collapsed [as if a roughly 8 billion times rise in cost wasn't already collapse! Hint of irony here. – JM]

    Let’s go back to “marks”. In 1913, the total currency of Germany was a grand total of 6 billion marks. In November of 1923 that loaf of bread we just talked about cost 428 billion marks. A kilo of fresh butter cost 6000 billion marks (as you will note that kilo of butter cost 1000 times more than the entire money supply of the nation just 10 years earlier).


  52. Shay Begorrah Says:


    Er, rather making my argument for me there… the financial industry had to lobby for change and deregulation. It was politicians that gave in to them…

    That is an interesting view of the apportioning of responsibility for an assault between the victim and the criminal. It might not fly in the court of public opinion.

  53. Michael Hennigan - Finfacts Says:

    Keep in mind folks that Ajai Chopra does not have to contend with an electorate.

    The Government rightly fears that the Irish would reject a referendum on closer fiscal union.

    A campaign would be a donnybrook for the malcontents across the spectrum, from right-wing Catholics to cargo-cultists; the IFA seeking concessions on CAP welfare and the comfortable defaultists would have a mighty time offering the prospect of free lunches to the gullible.

    It would be great craic.

  54. DOCM Says:

    @ All

    In my opinion, only Pat Leahy of the SBP among the assembled media grasped what Chopra was about.


    On the point with regard to the capacity of governments to “fix” their banks, this capacity is clearly constrained if they are themselves dependent on the bond markets. But that is exactly the “fix” they have to get out of.

    Winkler is particularly good on this point (page 4).

    “Governments also provide maturity transformation services. Like banks they have to rely on bondholders’ confidence in their ability to service the debt. This is often overlooked for two reasons….

    Firstly, governments do not literally trsnaform short-term debt into long-term assets. Indeed, in many cases they issue debt to finance current expenditure, for example when engaging in anti-cyclical fiscal policy. Thus, the de facto long-term asset governments are investing in is the ability and willingness of the taxpayer to service this debt….

    Secondly, government liabilities, in particular in advanced economies, are usually long-term and not – as in the case of bank deposits – short-term. Thus, a run on government bods is unlikely to lead to an immediate roll-over problem for the government concerned. This provides the government with more time to convince the markets that concerns about insolvency are unfounded. However, with debt ratios above 30% of GDP it is practically impossible for any government to repay its outstanding debt if due. So, even long-term bonds have to be rolled over and are thus vehicles for maturity transformation…”

    He adds a footnote. “I chose 30% as the threshold level following the findings of Reinhart, Reigoff and Savastano (2003) that emerging market external debt levels above 30-35% of GNP entail a sisgnificantly higher risk of a credit event”.

    The reference to the 30% is the really scary bit.

    However, the IMF may be riding to the rescue if the French newspaper Les Echos is to be believed.

  55. hoganmahew Says:

    “That is an interesting view of the apportioning of responsibility for an assault between the victim and the criminal. It might not fly in the court of public opinion.”
    Eh, no. Politicians are not victims. They are at least accessories. They should be policemen. It is up to them to guard against the creation of victims in unequal power relationships (financial services interests vs. citizens/taxpayers as an example).

  56. DOCM Says:

    @ All

    Should have used the spellchecker! Herewith the link to Les Echos.


    The IMF (read the countries putting up the cash) will not move until it sees the colour of Europe’s money. But without action by it, it seems unlikely that the EZ can cope with Italy (and Spain).

    P.S. The reference to emerging markets, who have to borrow in a foreign currencies, is justified because, as Winkler points out ” the euro – while being the domestic currency of all Member States – is not the domestic currency of any individual Member State”. This point is now being made by numerous other experts.

  57. Paul Hunt Says:

    Many thanks to all for the civilised and enlightening exchanges on this thread. Given the (unfortunately mostly pseudonymic) identity of the participants, I’m not particularly surprised. But it does highlight how much thr standard has fallen on other threads. It would be useful if ‘them what can do it’ were to kick off threads on more pressing domestic issues. But, then again, that might cut too close to the bone; it’s probably much more fun shouting the odds about high finance and politics at the EU level and the effects these are having on the poor little ole MOPE.

  58. The Dork of Cork Says:

    Sorry for being a tad uncivilised and all but ever since the summer of 95 I have become a stranger in a strange land.
    But I am a happy camper – most Irish people have become so mutated by the debt opiate that they have no reference point to normality – although I guess Ireland pre Maastricht was never a normal place by international standards – Thank God.
    Now we are more normal then most……. sadly.
    The spark is long gone from the place – its a broken country with no soul.

  59. The Dork of Cork Says:

    Not to worry – the army of the bland is unstoppable now – the generals just need to give their centurions one more credit meal and they will have final victory over the misfits.
    But this rising of debt over & above long term GNP or even GDP must seem disturbing to even the most loyal of Mammon worshipers.

  60. Ceterisparibus Says:

    It’s looking like next weekend will be more of the same…

    “Olli Rehn also won the weekends George Orwell 1984 award when he said they were “not reopening the deal, rather revisiting the deal” on private sector involvement in the second Greek bailout as a technical change was required because market conditions had changed. The German finance minister, Wolfgang Schaeuble, again called for further haircuts on Greek debt, while the French and the ECB continue to insist on any private sector participation being voluntary. From press reports it appears that 50% is the new 21%…”

    Good old Ollie …waffling again while Athens burns.

  61. Mickey Hickey Says:

    Reported this morning, Josef Ackermann head of Deutsche Bank is conducting negotiations with the Greek Banks on a 50% bond haircut. There are also reports that 50% is not enough and it will end up around 60%.

    This is significant due to the fact that if anyone is well connected in Germany it is Josef Ackermann. He is front running in the hopes of salvaging 50% because he knows that the German is taking a hard line on the bail out talks over the next few weeks and months.

    I find it interesting that there is no sign of street protests in Ireland. This will leave us in a weaker position in upcoming negotiations. The problem in Ireland is not just the Government, Bankers and Developers. The people en masse are so tuned out that they are next to useless. I can’t remember the last time I heard that Kerry saying “Get off yere feckin useless asses and go out there and do something useful.”

  62. Brian Woods Snr Says:

    @ DoC: “The spark is long gone from the place – its a broken country with no soul.”

    You reckon? I’d bet the ember is smouldering nicely – carefully secreted in a mossy overcoat. Just needs a good breeze. Then we are off to the races!

    “But this rising of debt over & above long term GNP or even GDP must seem disturbing to even the most loyal of Mammon worshipers.”

    Now, I fancy that that would imply levels of observation, understanding and intellectual engagement that I have not (so far anyway) witnessed. Or are these bozoes being terribly smart and artfully concealing their true understanding and intentions in a KGB-style fog of disinformation?

    Brian Snr.

  63. DOCM Says:

    @ All

    With a view to keeping up the quality of the debate, herewith a link to some essential reading which is directly related to the main subject under discussion on this thread.


  64. The Dork of Cork Says:

    We have become atomised – something changed in this country back in 87 , then this nothingness accelerated into the unkown back in 95.
    What was happening – which I did not understand at the time was the restructuring of the banking system – this gave the local Pavlov dogs a bone to crunch on – now its mere shock therapy.

  65. david burke Says:

    What is the obsession with Chops. The IMF is Bust, it borrows money off the US Treasury which is Bust and is lending money to us when we are bust. Its called Rigged Capitalism.

  66. seafóid Says:

    @ Mickey Hickey

    “I find it interesting that there is no sign of street protests in Ireland. ”

    I was talking to my Genevois private banker contact yesterday. He said the Irish have been emigrating for years. They are used to poverty. They will have no problem tightening their belts. That explains the yields coming in, he said. They will buy the adjustment.

  67. DOCM Says:

    @ Mickey Hickey et al



  68. Desmond Brennan Says:

    Merkel again is acting to downplay expectations of decisive action…rather preferring her fudge and muddle approach.

    One mustn’t forget that she is a rigorous scientist by background(physical chemistry), who is used to a high degree of exactitude. Indeed she betrays this by complaining she lacks all the info, and several times she’s said she only makes decisions when they are ripe. However in the real world, the world of finance especially, you frequently have to act on imperfect information…Merkel simply doesn’t get this, and seems to expect that the world will hang on and wait whilst the Greek puzzle becomes clearer.

    This is a deeply wrong approach to this type of decision making, acting decisively and creating certainty is what is required in order that the wheels of global finance and trade can work.

    Sure, this way she might get say a 15% better outcome to the Greek situation, and say 7% to the Italian…but that is small change in comparison to the damage whereby festering sovereign debt creates systemic toxic uncertainty.

    In years to come, it will be wondered why we let a dithering science prof cause a Depression…and given the US has so little political capital…it is incumbent on Dublin to call Berlin…and warn them that no more fudge can be made.

  69. Paul Hunt Says:


    Brave attempt, but I doubt it will catch on. There was a time, and not so long ago, when Colm’s Sunday sermons from the pulpit kindly provided by the Sindo merited a post by ‘them what can post’. But no longer. Perhaps it was OK then, when he was putting a well-crafted and economically justified boot into the ECB or senior EZ politicians, but now, when he’s highlighting nonsensical dogma or policy ineptitude on the home front, it’s not.

    We all have to mind our ‘ps and qs’ with the ‘powers-that-be’ so as to get back to ‘business-as-usual’ asap, don’t you see?

  70. The Dork of Cork Says:

    You are intentionally blind to the banking systems creation of non productive liabilties while concentrating your ire on inefficient archaic add ons to the debt matrix.
    You cannot analyze the deficiencies & characteristics of organisms in isolation.
    You remind me of a 18th century naturalist with a unhealthy interest in water beetles that always ignores the wider ecosystem of the pond.

    We are gone beyond the collection phase in this “science”

    My advice is to observe some OSI maps of this dark pond

  71. Joseph Ryan Says:


    I was talking to my Genevois private banker contact yesterday. He said the Irish have been emigrating for years. They are used to poverty. They will have no problem tightening their belts. That explains the yields coming in, he said. They will buy the adjustment.

    Careful now. Or we could soon have another French idea to have the Irish pay the Greek debts as well! Who knows it could be a done deal already!

    Its interesting to see Ackerman taking over the reins in the EZ/Greek crisis.
    The Real European Masters take over the wheel.

    How do report a person as negotiating a 50% discount. If you know the discount, then what is there to negotiate.

  72. Paul Hunt Says:

    @The Dork,

    You speak in riddles. Very few of us have any idea what you’re on about. When any one of us attempts to understand you retreat to ancient transport or power generation systems. So, most of us have given up.

    My focus is on effective democratic governance of economic activity in general and of the financial sector in particular. That should be more than enough to be going on with.

  73. The Dork of Cork Says:

    No I disagree, its just very basic input – output observation , I may use ancient settlement patterns to make a point but until recently I hoped we would not have to enter medieval conditions to learn a lesson.

    I agree things such as the CIE union culture is a pox on us – but theres a big difference between a Bus turning up 15 minutes late and not turning up at all because the population density is so scattered.

    THE inherent fiscal drag beyond the more narrow banking costs is just the wider costs of the banking opium / credit production.
    Also advocating the revocation of ancient corporate / banking licences rather then “nationalisation” which is nothing more then a nationalisation of debts and a selling of assets is not very complex.
    Fishers argument of nationalising money & not banks is on one level very simple.

  74. Chris Says:

    I listened to the speech, interestingly put forward a U.S. FederaL Deposit insurance Corporation type scheme for Europe funded by the banks themselves, which really has quite obviuosly been needed. Berlisconi even pushed for a EU wide bank insurance scheme in 2008 and was shot down by the Germans. Hope Mr. Chopra can push to make this a reality wonder what Ms. Lagardes views are.
    Once again one has to be sceptical as to why the IMF are coming up with this now and didn’t push for it before. The sceptics would say because its now German, and French banks having difficulty instead of Irish.
    Ireland really are being treated as a pawn in this game of chess. Just like the wall street demonstrators, most Irish people don’t have the economic and financial education to know how they are getting treated badly by fellow EU governments and banks. However they know they are and the bad feeling will last unfortunatly.
    Many negoatiations are happening now. A key in any negotiating is not to have a win-lose outcome, but a win-win. If you get too nice a deal over your supplier, maybe they will go out of business and youll be left with no supplier.
    The EU/US have made a win-lose with Greece, Ireland and Portugal. Well done to German, French, U.K. and U.S. banks and behind them taxpayers. They won. However the Irish Greeks and Potuguese lost, losing EU co-operation, risking future political integration and causing an achilles heel for global recovery.
    The banks in Ireland and the US have made a win-lose deal with taxpayers. So the taxpayers are annoyed and are in the streets. Win-lose is not the optimum outcome.
    Hopefully politicans and banks and make sure future deals are win/win.

  75. seafóid Says:

    Ajay Chopra is a sort of a cross between the lord lieutenant and Jack Charlton. I wonder does he have any Wolfe Tones CDs.

  76. Chris Says:

    @ D. Brennan,
    Interesting point on Dr. Merkels academic background. Her misinster of finance would be the one expected to have financial qualifiactions. I believe Mr. Schuable is extremely well qualified in that area and he has many others in his department well qualified.
    Compare that to Mr. Noonan and the dept of Finance.
    Its like Ireland going to play Germany in soccer with a GAA team. Really it is.

  77. Eamonn Moran Says:

    Great Article by Roubini


  78. Chris Says:

    Correction, Mr. Schuable does have a degree in Law and economics, not much experience in finance. So just qualified not extremely well qualified.
    In any case Ireland should go like the States and Denmark and appiont their finance minister istead of having them voted in. For example Dr. Honahan would be more use as minister by finance than Head of basically a day to day banking supervisory comittee.

  79. The Dork of Cork Says:

    I hate to break this to you but Honahan is the de facto Taoiseach since last years morning appearance on Radio.

    As for bank insurance of deposits – didn’t Irish Banks insure the first 20,000ish back in the free market hypothesis days.
    Before we go about making this a formal informal law rather then the informal formal law of today its best to have full deposit banks in operation that are separated somehow from the trading banks.
    But in my opinion if you have a CB in operation the entire M1 money supply should be on their books from the start – then only term loans are the commercial banks problem.

  80. hoganmahew Says:

    “Once again one has to be sceptical as to why the IMF are coming up with this now and didn’t push for it before. ”
    I think that might be the wrong question – perhaps the better question would be “why are the IMF going public with this now?”.

  81. grumpy Says:

    @Paul H

    Colm’s columns were eagerly posted regularly on here and described in the intros as “agenda setting” and “cracking” when the target was the ECB or the Germans.

    Maybe the silence reveals that Colm’s current agenda doesn’t suit some others?

    Could just be a coincidence of course ;-)

  82. Desmond Brennan Says:

    Yes, in the US Obama very much deferred to Geither and others, but Merkel seems to lead more from the front. And Schauble is a serious problem, as he’s recently claimed public debt caused the ’08 crisis.

    The public debate in Germany is most odd….they seem to see the issue as normative left v right…profligacy v prudence – and I would be on the side of Right and prudence. However they seem to want to deny the damage which has happened, and muddle on irrespective of systemic financial stability. They don’t seem to realise how high the cost of muddling on is.

  83. DOCM Says:

    @ All



    The German spokespersons are right. There is no magic wand that will solve the current problem overnight. It is to be hoped, however, that the current splurge of statements is part of a negotiation and not confirmation of a total stalemate.

    It would be hard to come to any particular conclusion. Ackermann is quoted in Stern today as follows; “It is not the capital adequacy of banks that is the problem but the fact that government bonds have lost their status as risk-free assets. States, governments and politicians have led Europe into the current disaster, not the financial institutions”.

    A bit of a one-sided view but not entirely incorrect. However, the real problem is not who is right in the blame game but the incoherence of the AAA governments’ position, Germany’s being the decisive voice. Again, Winkler explains this in a detailed way (page 21) “it is striking [surprising]that euro area governments have discussed intensively how to involve the private sector in burden sharing in any form… while barely explaining to their electorate the need for loss sharing arrangements among solvent euro area governments, if a Member States should default on its obligations to the EFSF or the ESM”. Put more simply, the question that can be asked is how it can be logical to try and restore the confidence of private investors for the future by imposing losses on them now that are greater than was agreed only a few months ago? Or, more prosaically, you do not stop those doing the running by making them run faster.

  84. Joseph Ryan Says:


    re: Colm McCarthy articles

    Re:- A questionable observation in Colm McCarthy’s Indo piece yesterday

    Delivering a jobs dividend requires a consistent policy of forcing down the cost structure of the traded sector….

    Much of the traded goods sector is operating at best at breakeven or loss at present. In fact the only thing that will save a lot of the traded sector from further job losses is price increases not price decreases.

    He is of course absolutely right about the ‘services’ sector including electricity, consultants and of course our tribunal lawyers who are still raking it in.

    Another nice earning profession at present is that of liquidator.
    It cost approx €20,000 (generally cash down) for the most minimal liquidation. That is why most directors now ‘park’ the companies and walk away, usuallt to a sister company or a parent company. Sorry that should be drive away. One finds that the director’s car is usually one of those items that manages to avoid even the most stringent cut backs.

  85. Ceterisparibus Says:

    It looks like nothing at all is going to happen next weekend

  86. Ceterisparibus Says:

    Sorry meant to post link

  87. DOCM Says:

    @ Ceterisparibus

    Thanks for the link. (As others have commented, we owe a debt of gratitude to Der Spiegel for keeping a wider audience up to speed on what is happening in Germany).

    Gavyn Davis in his excellent blog puts together the sums and places the emphasis where it belongs viz. increasing the firepower of the EFSF to ring-fence Italy and Spain (the real problem) and, in the process, attracting the support of the G20 through the IMF. The details of everything else are not exactly secondary but can be fixed in a longer timescale.


    Merkel, on her past record, is capable of practically anything. The issue is a straight yes or no. To quote Winkler “while barely explaining to their electorate the need for loss sharing arrangements among solvent euro area governments, if a Member States should default on its obligations to the EFSF or the ESM”. It would be more accurate to say, as Quentin Peel points out in the FT, that Merkel has alone not been explaining she has been actively creating the myth that there will be no cost to the German taxpayer. The loss of electoral support suggests that few any longer believe this fairy tale especially against the background of falling share, especially bank, prices and a halving of Germany’s growth prospects.

    Either the EZ hangs together or all of the EU27, including Germany, will assuredly hang separately. The fact that Osborne has indicated a willingness to see IMF involvement is confirmation of this.

  88. Chris Says:

    Simon Johnson points out here that while the FDIC has worked very well in the states in many cases, for example winding down CIT group with 80 billion of Assets with no bailout and without affecting the real economy.
    He also points out its shortcomings, mainly lack of control of cross-border banks and the lack of international co-operation here. Actually what is really needed is an FDIC type prgram or some kind of agreement for bank resolutions for the G-20 or the world, certainly for the EU and US. The challenge to this is governments and their national champions.

  89. Chris Says:

    @ Desmond,
    The German public has not been informed of the failure of their own institutions. Some of my German and Austrian friends told me in Sep 2008 that Ireland was to blame for the German taxpayers having to bail out German banks. They said that it was the German banks Irish branches which caused all the losses. They said that Irish lack of regulation was to blame. They were annoyed and seriously believed what they had been told in the media.
    I was able to put them in their place fairly quickly. After all the German banks made their decisions to take on too much risk, wherever they were based.
    I can’t speak to the rest of Germany who have obviuosly been sold this story that they are superior and the silly perhiphery is too blame for everything.
    We are waiting for the German public to come to the conclusion that actually their own banks and policy makers (breaking the fiscal stability pact) are to blame. Then we can get on with further integration.
    Perhaps Obama could organise a helicopter drop with pamlets to the Germans expalining this.

  90. Paul Hunt Says:



    We’re seeing the long drawn-out and grindingly slow ‘small steps’ policy of Chancellor Merkel as she positions herself to gradually reveal the truth to her electorate – while all the time endeavouring to conceal the fact that she, her colleagues, her erstwhile ‘grand coalition’ partners and her predecessors have lied consistently to them over the last 10 to 15 years.

  91. seafóid Says:

    A very interesting paper by Chopra, particularly in the area of recap and what needs to be in place before Greece goes off the rails. Otherwise presumably the default is going to be a total mess.

    ” Efficient resolution of banks with activities across many EU-countries would be greatly assisted by the creation of a common bank crisis management and resolution regime that would be binding to all member states. In this respect, we fully support efforts of the Commission to establish a harmonized framework that would provide EU supervisors with strong powers to take remedial actions at an early stage, and a with a resolution toolkit to deal efficiently with bank failures while minimizing costs to taxpayers. But the Commission proposals are not sufficiently ambitious and coordination problems and reaching efficient outcomes may remain difficult.
    As we have argued in the past, a better solution in the medium-to-long term would be to establish a European Resolution Authority covering all banks and backed by a common backstop at the EU level that ends the need for national financing. A common pan-European backstop would help break the link from the balance sheet of banks to the balance sheet of the sovereign. Hence, when a bank fails, the cost should not fall exclusively on the taxpayer of the home country, but should be borne by an EU-wide resolution fund. Experience has also shown that in a crisis situation involving cross-border banks, cross-border cooperation between governments may not work as smoothly as one would hope. Hence, ex ante rather than ex post burden sharing solutions are required. Such a resolution authority would need to have decision making structures that allow for effective and rapid intervention as bank instability can evolve rapidly, while balancing collective interest among member states. It would require a high degree of coordination and harmonization with regard to sovereign fiscal and financial stability issues to operate effectively.
    Cost-effectiveness of the resolution regime should be a major objective. Thus, the new resolution regime should ensure that losses are borne, first, by shareholders and holders of equity-like instruments, and second by uninsured creditors, including senior creditors. “

  92. David O'Donnell Says:

    Cartoon of the week



  93. oneoffireland Says:

    blah, blah, blah…blah, blah, blah

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