European banks on the verge of collapse:
Senior analysts and traders warned of impending bank failures as a summit intended to solve the European crisis failed to deliver a solution that eased concerns over bank funding.
The European Central Bank admitted it had held meetings about providing emergency funding to the region’s struggling banks, however City figures said a “collateral crunch” was looming.
“If anyone thinks things are getting better then they simply don’t understand how severe the problems are. I think a major bank could fail within weeks,” said one London-based executive at a major global bank.
Stage 1 was the 2008 credit crunch that led to the autumn banking bailouts. Stage 2 is the “recovery” which was nothing but the banks borrowing free money and gambling it in order to “shore up” their balance sheets. Stage 3 is the 2012 credit crunch that leads to the collapse of many of the banks that were propped up in Stage 1 as the Stage 2 bets fail to prove sufficient.
One thing that hasn’t been much discussed is the way in which the EU’s designs on the City (London) would probably kill the majority of the big UK and US banks within months. That is probably why Cameron found the backbone to exercise the British veto; it wasn’t in the interest of the British people, but rather in the interest of the Anglo-American banks.
And as Ambrose Evans-Pritchard notes, the new Merkozy-led EU treaty has nothing to do with resolving the burgeoning financial crisis.
The leaders of France and Germany have more or less bulldozed Britain out of the European Union for the sake of a treaty that offers absolutely no solution to the crisis at hand, or indeed any future crisis. It is EU institutional chair shuffling at its worst, with venom for good measure.
Of course, Evans-Pritchard fails to note that for Britain, being bulldozed out of the EU would be the best thing for it.