Ailing banks

The return on equity of the 19 largest internationally active banks has fallen considerably. It is a sign that was not solid hour of operation. In the last two years, the banks had to be neat feathers. The return on equity has fallen considerably. The U.S. government has now ventured a first step to prevent it. The discussions lead past the root causes of the crisis.

They have failed primarily because the state supervisory bodies. If one wants to avoid the mistakes of the past, we need an independent regulator, which can enforce its actions effectively without political interference.Specifically, the independent regulatory body should support the Treasury subordinate Federal Financial control. Another object of the supervision is to adopt new capital rules.

It is important that the provisions for the deposit of equity after the systemic risk of a bank set up. Nevertheless, what happens when a systemically important bank becomes insolvent? In this case, any bank to create a contingency plan that shows how the Bank can unwind in the bankruptcy case. Thus, the bankruptcy claims for savers and taxpayers are minimized.

Bank balances detoxify

The beginning of 2010 started with hope and fear. The hope is that continued in the first half of 2009 accomplished turnaround in the economy and the slight recovery will go on, after the economy had previously fallen dramatically. The fear is that the instability of the recovery in the face of a difficult liquidity position of the company may lead to another crash. The turnaround came earlier and harder than expected by most observers prior year period. This demonstrates the robustness of our economic system and it should always be encouraging. Nevertheless, despite the revival of 2010, it will be the critical year of crisis management.

Especially in the first, half of the year will show whether the chosen path has continuous expansion. Particularly critical, the threat of a credit crunch is rated, although an appropriate macroeconomic finding does not yet support this fear.

The national debt of Greece has increased over the years 2009 economic strength.

The Stability and Growth Pact must be changed. Currently, the rules cannot exit from the euro, either voluntarily or by force. Anyone who has ever had in it, made it. Greece has already demonstrated in the implementation stage, but after the Euro 2001 and accession to the year 2006 (2.9 percent) in each year the Maastricht budget deficit criterion of 3 percent torn.

How many years later turned out this was done with the help of “creative accounting” to a considerable extent and with premeditation. Greece during the days of the drachma or risk premiums of 500 basis points relative to German government bonds had to lay on the table. Currently apply risk premiums of 300 basis points for Greek government bonds. Fact is that the Greek government has cheated at the expense of other members in the euro, which will have to pay the expensive today.The euro has only a chance if the two pillars of stability function. The independence of the ECB and its strict focus on monetary stability and fiscal compliance with the Stability and Growth Pact with its deficit targets for the general government debt (60 percent of GDP) and the budget deficit are (3 percent of GDP), therefore not disposable. Therefore, it is better an end with horror than to be a horror without end.

The control is good

Greece has received from the European Commission imposed a strict austerity program. Fall to 2012, the government deficit to 2.8 percent of GDP.The government deficit must be reduced within two years to 2.8 percent. A decline of about 10 percentage points in comparison to today. Good, because the causes of the imbalance are homemade. The hope of the Greeks on the funds of the EU Monetary Affairs.

Instead, the Commission threatened Greece to penalties if the imposed austerity plan is not followed. Of course, one thing is certain. A clear definition of a concrete sentence is essential. Because with Portugal and Spain already waiting for the next bankruptcy candidates.