This is a very dangerous road to travel down: it basically : Gumpak, Mochilas autónomas para la eliminación de chicles (Distribuidor exclusivo para España y Portugal)

Europe’s insoluble problems

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The global financial system 2018 canada goose outlet is being refined in and day canada goose outlet toronto factory out, El Erian said, and as a result the balance between public and private is shifting and canada goose coats on sale regulation is altering. is not being done according to some master plan, but in reaction to a series of crisis management interventions.

None of these piecemeal policy moves buy canada goose jacket cheap restored confidence in the markets, he said. What is needed is a coordinated and simultaneous set of policy actions globally in four areas: restoration of credit markets, elimination of deteriorating assets from balance sheets, injecting capital quickly into the banking system, and regulatory forbearance.

Oh, wait, that was El Erian back in October 2008. But canada goose he saying something very similar now:

In addition to specifying higher prudential capital ratios, governments must now bully banks to act immediately. Where private funding is not forthcoming, which should now be the presumption for a Canada Goose sale growing number of banks, recapitalization must be imposed, in return for fundamental changes in the way financial institutions canada goose replica operate and burdens are shared.

The main difference, here, is the move from forbearance Canada Goose Jackets the first time around, to governments forcing changes in the way financial institutions operate today. But either canada goose outlet store linked website locations way, this is basically, the bank nationalization debate all canadian goose jacket over again. We ended up taking only modest stakes in banks, and getting through the crisis through the massive application of liquidity by the Fed. If the central bank, as lender of last resort, ensures that banks will always be funded, then you don need nationalization. It a bailout by monetary rather than fiscal means, and it a lot friendlier to bank shareholders Canada Goose online than nationalization is.

But the problem in Europe is that the ECB is displaying neither the willingness nor the ability to act as a lender of last canada goose store resort and in that situation, the only policy action left is for governments to step in and try to backstop the banking system directly. This is a very dangerous road to travel down: it basically what Ireland did when it guaranteed the liabilities of the entire Irish banking system, thereby consigning itself to a national fiscal nightmare for the foreseeable future.

So color me unconvinced that the solution to a liquidity crisis cheap Canada Goose is an injection of capital. At best it insufficient; at worst it unnecessary, and only serves to exacerbate the painful process of deleveraging in a pretty drastic manner. After all, liquidity problems can hit anybody, no matter how solvent they are Canada Goose Online just ask the. The Bund auction failed in large part because the European liquidity go round is utterly broken right now, and it hard canada goose clearance to canada goose clearance sale see how things would improve if Europe sovereigns, including Germany, started getting into the banking business.

The idea behind sovereign recapitalizations is our old friend Anstaltslast the idea that if a bank is owned by the state, then there an implicit government guarantee on its liabilities. If Europe sovereigns started taking substantial canadagoosejacketsaleca equity stakes in their own banks, then there would be fewer worries over Canada Goose Coats On Sale bank solvency: it almost impossible for a bank to go bust if the sovereign really doesn want it to. But in the context of serious worries over sovereign solvency, this tack doesn make a lot of sense. Once you nationalized, there no real end to the degree to which you might end up being on the hook for the banks you now own: you can credibly claim that the banks you own are now so well capitalized that they never need any more money. And in this case, of course, the worries over European bank solvency are worries canada goose black friday sale over European sovereign solvency. You can tie these two rocks together, through nationalization, and expect them to float.

El Erian is very good at explaining the problem which Canada Goose Outlet needs solving:

Europe must still stabilize its sovereign debt situation. But this Canada Goose Parka is now far from sufficient. Policymakers must also move quickly to contain banking sector frailties, and do so using a more coherent approach to the trio of capital, asset quality and liquidity.

It seems to me, though, that sequencing matters here. Liquidity is always more important than capital/solvency. Give an insolvent bank enough liquidity, and it can live indefinitely. Remove liquidity from a bank, and it dies immediately, no matter how solvent it might be or how high its capital ratios are. And as for asset quality, we pretty much talking canada goose deals a zero sum game here: when the banks dubious assets are the sovereign liabilities, the real solution is inflation, not nationalization.

And as for banks non sovereign assets, good luck with selling those. The shadow banking sector knows exactly canada goose coats what happens to asset prices when sellers put 5 trillion of those assets on the market at once, and there literally no one out there who would dream of buying such things at or near par.

In every crisis there a point of no return if you don do XYZ in time, it too late, and the crisis is certain to get out of anybody control. I increasingly convinced we already passed that point of no return in Europe. The banks won lend buy canada goose jacket to each other, the Germans won do Eurobonds, and the ECB won act as a lender of last resort. The confidence fairy has left the continent, and she isn about to return. Which means, as we used to say in 2008, that things are going to get worse before they get worse.

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