Steinbrueck of Germany With Ironies of Ironies…
You have all probably heard what Steinbrueck has said..
Steinbrueck criticized the United States for failing to adequately regulate investment banks and said free-market policies embraced by the United States and Great Britain that emphasized a short-term "insane drive for higher and higher profits" were partly to blame for the crisis.
So what is his solution?
The finance minister said he would push for a global ban on speculative short selling and would use next month’s meeting of the Group of Seven finance ministers and central bankers in Washington to press for new rules that would prevent banks from fully securitizing loans and selling them to third parties.
But here is the irony as per the German news today… And PLEASE any reader who wants to disprove me do it with facts. The banks that are having problems and did the worst trades are…
…drum roll…
…banks owned or heavily influenced by the German government…. You would figure that the government who is proposing regulations would have regulated their banks?
I cracked up laughing!!! So when the German news asked Steinbrueck about this he said, "well, ahh, oohh, ummm…" Come on Steinbrueck stop the rhetoric and get back to reality! Oh wait, I forgot it is, do as I say, not as I do!
Hello There Mr Roboto!
(the song and era says it all... http://www.devspace.com)
1 Comment Add your ownSubscribe
1. crni | September 25th, 2008 at 5:35 pm
This from Financial Times:
“Europe’s banks will benefit greatly from the effective nationalisation of the US financial system now being planned, because the larger ones, which all have significant US operations will also benefit from the $700bn bail-out fund. But it remains unclear how many of these assets they still hold in their balance sheets and how volatile their liability base will prove if confidence does not return quickly.
The crucial problem on this side of the Atlantic is that the largest European banks have become not only too big to fail, but also too big to be saved. For example, the total liabilities of Deutsche Bank (leverage ratio over 50!) amount to about €2,000bn (more than Fannie Mae) or more than 80 per cent of the gross domestic product of Germany. This is simply too much for the Bundesbank or even the German state, given that the German budget is bound by the rules of the European Union’s stability pact and the German government cannot order (unlike the US Treasury) its central bank to issue more currency.
Similarly, the total liabilities of Barclays of around £1,300bn (leverage ratio 60!) are roughly equivalent to the GDP of the UK. Fortis bank has a leverage ratio of “only” 33, but its liabilities are three times the GDP of its home country of Belgium.”
Another gem was some statement by a European official that the measures taken byt the US gov’t are not suitable for Europe. So if/when the excrement really hits the fan in EU, what will happen? I wish I was in Switzerland, like you….
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