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New European banking regulations are just 'non-binding expectations'

eurozoneBanks in Europe have got the upper hand in the regulation wars, aiming to leave EU citizens with the bill for years of poor judgement and non-performing loans.

These NPLs held by European banks total €759 billion, over 5% of all loans,  the banks want taxpayers to shoulder the burden.

According to financial blog, Wolf Street, Currently six out of the 19 eurozone countries have an non-performing loan ratio above 10%, namely, Ireland:12.8%, Italy:11.8%, Portugal:18.2%, Slovenia:13.6%, Greece:46.6% and Cyprus:34.0%

The European Commission and the European Central Bank have unveiled a long awaited package of regulations that could have been written by the bankers themselves, in fact it probably was.

The reform package goals are watered down from the original ECB proposal, due to the banking lobby and EC pressure to create general rules of a 'non-binding' nature.

Europe’s banks feared that tough regulation would have a negative impact so lobbied to prevent stiff rules from being imposed.

The new ‘rules’ will start on April 1, with the supervisor stating that it won’t actually force banks to act for several years. The guidelines recommend that banks have to make full provision for unsecured bad loans within two years. For secured loans the deadline will be eight years.

The ECB said the guidelines were “non-binding expectations” and would serve as the basis for dialogue with banks on how they make provisions for bad debts.

While banks sit out their free period before having to even think about these non-binding regulations, they will be lobbying to continue to receive taxpayer funded aid.

Hidden in the ECB guidelines is how to set up ‘bad banks’ or State asset management companies to buy bad loans from banks, thus shifting bad loans onto taxpayers, a move being pushed for by Portugal’s Vítor Constâncio, ECB Vice-President and endorsed by Portugal’s PM; António Costa.

One of the biggest advantages, for the banks, of launching this non-performing loan regulation and ‘bad bank’ initiative at Euro level is that local taxpayers have no say in their further impoverishment as the banks ditch their useless loans at inflated prices into a central dustbin.

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Comments  

0 #6 nogin the nog 2018-03-21 23:28
Quoting Cynical Al:
Quoting nogin the nog:
Banking is the largest and most dishonest criminal enterprise ever allowed to grow into what it is today. UNTOUCHABLE.. :-*

Understatement!! When you have central banks (which are private enterprises) printing money out of thin air borrowing it to commercial banks and countries and then expecting the loans to be paid back with interest, it's beyond criminal.

AHH BUT ITS ALL LEGAL AND ABOVE BOARD
AL :-*
0 #5 Denby 2018-03-21 13:13
Terry P,
Vulture funds are different from Government backed loans which have been provided to the banks and a guarantee to repay the loans would be standard practice. When the government of a country is not in a position to provide all of the finances to to bail ot it's banks, then this is where the vulture fund company's come in. They pick over the remainder of the dept and purchase it at a bargain lot.
Most country's have to resort to these measures as there are very few options at their disposal. However when the country becomes more affluent they can purchase some of the assets that they sold to to the vulture fund company's,, but at a much inflated price.
+2 #4 Cynical Al 2018-03-21 11:05
Quoting nogin the nog:
Banking is the largest and most dishonest criminal enterprise ever allowed to grow into what it is today. UNTOUCHABLE.. :-*

Understatement!! When you have central banks (which are private enterprises) printing money out of thin air borrowing it to commercial banks and countries and then expecting the loans to be paid back with interest, it's beyond criminal.
+2 #3 nogin the nog 2018-03-21 09:52
hmm
Puppet Governments will never have the upper hand with your Banks. Banking is the largest and most dishonest criminal enterprise ever allowed to grow into what it is today. UNTOUCHABLE.. :-*
+1 #2 TerryP 2018-03-21 08:51
Quoting Denby:
According to Bloomberg, it explains how Europe is dealing with it's bad loans.
The countries with Europe's most non performing loans, starting from the highest is Italy then France, Spain, Greece, UK, Germany, Netherlands, Portugal, Ireland and Cyprus.
Just to keep in mind that, Bank's that have been bailed out by their Government have to pay their debts in full and with interest even if it is small interest.


So, will Novo Banco's vulture fund owners will be repaying the €3.9 billion thrown at the sinking ship by Carlos Costa and the additional €3 billion we will be obliged to throw at the problem as Lone Star throws all its bad loans at the Resolution Fund? You are right in that the Resolution fund is due to be repay the Treasury over coming decades as it has to borrow bailout money. The banks own the Resolution fund. These are the banks that are now overcharging us for bank accounts so they can make up their profits.

In the end, we are all paying for Ricardo Salgado's megalomania, arrogance and stupidity.
0 #1 Denby 2018-03-21 08:21
According to Bloomberg, it explains how Europe is dealing with it's bad loans.
The countries with Europe's most non performing loans, starting from the highest is Italy then France, Spain, Greece, UK, Germany, Netherlands, Portugal, Ireland and Cyprus.
Just to keep in mind that, Bank's that have been bailed out by their Government have to pay their debts in full and with interest even if it is small interest.

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