EU Finance: the Emperor’s New Haircut

The latest in the great Eurozone Crisis Saga.

And what is a haircut, you may ask?

"Gary Jenkins, head of fixed income at Evolution securities, outlined what a haircut would mean for Greek bond holders. ‘It involves a "voluntary" bond exchange with a nominal discount of 50% on notional debt held by private sector holders with €30 billion provided by the eurozone member states for credit enhancements, and it aims to reduce Greek debt to 120% by the end of the decade.’" Citywire.

Sounds like more of the usual paper-shuffling and prestidigitation to me.

How about recapitalisation?

"To what extent taxpayers have to plug the gap – and whether state aid rules then kick in – could depend on the timescale banks are given to raise the capital. Huertas told Newsnight that the EFSF would be there as a "last resort". He said: "The plan is for banks to access public markets first," before turning to nation states for support – and then the EFSF." Graun.

Yeah, yeah, yeah ….

Maybe commenter Moggoid sums it up better, over at the Slog: “I stumbled upon this article – tying to find out what “recapitalisation of banks” actually means. And I gather it means that somewhere large amounts of money are found and then just given to the bank – Is that right?”

The banks love the deal, which should make anyone who’s not a banker suspicious. The much-courted and fawned over “Markets”* love the deal - but then they loved the glistening 2000s bubble that preceded the 2008 Crash, didn’t they. So what do they know.


*The "Markets" - basically a bunch of saddoes with nothing better to do than play Crackberry with large numbers and screw the rest of us.

Can Banking Be Good?

With the end of the tax on bankers bonuses, government borrowing this April the worst on record and small business still being held to ransom by the financial sector, NEF and Compass are holding a Good Banking Summit today, in a perhaps forlorn attempt to inject some realism into the discourse. There don't seem to be any details online, but Ann Pettifor at Debtonation blog is one of the speakers, doing a bit of last minute publicity.

Loans & Lies: Bankers and Politicians Out of Touch

Back in the day the local bank manager was a key figure. Someone who knew his patch and the people and businesses in it, who would be a good risk and who wouldn't. Nowadays that's all out of the window, as David Boyle explains:

"Neither the politicians nor the bankers will admit it - in fact they collude in this - but the big banks are no longer able to lend effectively to the SME sector. It isn't that they won't, it is that they have consolidated beyond the point where they can. They have no systems, no local managers, which would allow them to. But until the politicians accept this, and the bankers admit it - which they do privately - we can't move on ..."

"A friend of mine who has a small business approached their bank for a loan last week. They were told they had three options, a loan to buy a car, a loan to go on holiday or to put it on their credit card. This is another symptom of the Big Lie. It is time someone in frontline politics had the courage to nail it once and for all."

What a Lot of Bankers!

The Daily Mirror and Ann Pettifor have been investigating, and found that, guess what, the government which is very anxious that we shouldn't be so down on bankers, is made up of .....