UniCredit in talks on 20 billion euro bank rescue fund
The announcement of a rescue fund of 20 billion euros made by large banks to service support structure for the banking system is a process that has many advantages.
Firstly, it is normal and traditional, that a fund be established to support customers of banks: it exists in all Western countries at the national level. The fact of creating a fund of this size at the international level is a logical continuation of global banks. It is also a measure which should be reassuring.Then it is indeed a fund whose mission is defined concrete that will be managed by banks. I can hear the critics on the risk of bias. It is wrong to know the banking world: the fund managers will be extremely parsimonious and intervene only in cases où bankers armed with their technical and analytical capacity, will be determined at the time the amount, and how the institution will benefit from this intervention.
Alessandro Profumo, boss of UniCredit, Italy’s largest bank, which seems to be at the origin of this initiative, also pointed out that the loans will be accompanied by a pledge made on assets. It seeks the support of Banco Santander and Deutsche Bank. What do they have in common? They have survived the crisis without government intervention. There is also the influence of increasing role of the International Institute of Finance, which works to strengthen the credibility of the banking sector.
Moreover, such a fund may operate extremely quickly in case of unexpected difficulties specific. However, it is often the first days of a crisis that needs exist. We will remember the remarkable intervention by the European Central Bank to a certain Friday in August 2007 to 94 billion euros. This saved us a massive liquidity crisis, with the intervention of the Federal Reserve to $ 40 billion to USA.
Finally, it should highlight, if Europe persisted in his intention to tax the banks, that his intentions are budgetary or vengeful, but do not seek to strengthen the banking sector. In a previous post on this duty, I ‘I tried to highlight the profoundly ambiguous nature of the European initiative: it also involves the removal of a tax, not community, but national.
Once is not custom, such a banking initiative deserves to be applauded and encouraged, and the banks who participate will demonstrate that it is not with words but with actions, than private banks regain the credibility that they need international markets. It also looks forward to the new rules that Michel Barnier will propose to the defense of consumers and investors and those to be established for derivatives. I fail to return.
