Some European Banks Need to ‘Die in an Orderly Fashion’– New Bank Supervisor!

• Great words of encouragement! Yeah right?! Got physical gold yet? Don’t wait until ‘some of these European banks that need to die’ become your bank that is scheduled to die! Your savings will largely disappear!
  –
• Some European banks need to ‘die in an orderly fashion’– new bank supervisor! 
  by http://rt.com/ 
  Weak banks need to fail in order for the European Central Banks’ stress tests on lenders to be successful and credible, the new chair of the supervisory arm of the bank Daniele Nouy said. Only “good” banks with strong capital will survive.
  –
  “We have to accept that some banks have no future,” Nouy  told the Financial Times (FT) in an interview published February  10, 2014. Nouy will serve a five-year term.
  –
  The single supervisory mechanism (SSM) is a regulatory body of  the EBC that along with the London-based European Banking  Authority, will conduct an asset quality review, and the health  of 130 banks that hold about 80 percent of all bank assets in the  18-member currency bloc.
  –
  The mega-regulator will either close “non-viable”  banks and attempt to re-capitalize weak, yet “viable”  lending institutions by November 2014, when they take over as the  region’s bank regulator and announce the results of the   “stress tests”.
  –
  “I hope that we will be able to resolve to put banks in  run-off and not necessarily try to combine bad banks with good  banks,” Nouy said.
  –
  “I do not have any idea of how many banks have to fail. What  I know is that we want to have the highest level of  quality,” she told FT.
  –
  The ECB will assess a lender’s key risks, including liquidity,  leverage and funding, as well as asset quality and the ability of  a banks’ balance sheet to resist stress scenarios.
  –
  “They may need resolution plans because they have to die in  an orderly fashion; that’s very important for financial  stability,” Nouy said.
  –
  The French national was appointed to chair the ECB Supervisory  Board in December after a long stint at the Bank of France.
  –
  “We have to let some banks disappear in an orderly fashion,  and not necessarily try to merge them with other institutions. We  don’t want banks disappearing in a disorderly fashion, that’s the  main point.”
  –
  Nouy’s message is in step with Mario Draghi, who has previously  said some banks need to fail in order for the health check to be  legitimate. The tests in 2011 were widely seen as unsuccessful  because lenders hugely underestimated their risks.
  –
  “If they do have to fail, they have to fail. There’s no  question about that,” Draghi said in October.
  –
  read more!

end