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Eu Chief Daniele Nouy: Some Banks 'have No Future' Need To 'disappear In Orderly Fashion'

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http://www.independent.co.uk/news/business/news/eu-chief-daniele-nouy-some-banks-have-no-future-need-to-disappear-in-orderly-fashion-9119305.html

The new head of banking regulation in the eurozone, Daniele Nouy, has warned that some banks have no future and should be allowed to go under.

Nouy, head of the new Single Supervisory Mechanism that will oversee banks in the euro area, said she agreed with European Central Bank head Mario Draghi that the forthcoming health check on the region’s biggest lenders would have to fail some banks.

“We have to accept that some banks have no future,” she told the Financial Times. “We have to let some disappear in an orderly fashion, and not necessarily try to merge them with other institutions.”

ECB? BoE? The Fed?

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There are plenty of UK headquartered banks (and US banks etc) operating in the european/euro region and under the ECB so presumably it could effect them too - if they fail the "health test" being at least told to withdraw their operations and "disappear".

Edited by billybong

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There are plenty of UK headquartered banks (and US banks etc) operating in the european/euro region and under the ECB so presumably it could effect them too - if they fail the "health test" being at least told to withdraw their operations and "disappear".

I think it's safe to assume big UK and US banks will not be the banks flagged up in the stress tests. Think it will be smaller lower tier regional banks who are deemed to have issue.

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I think it's safe to assume big UK and US banks will not be the banks flagged up in the stress tests. Think it will be smaller lower tier regional banks who are deemed to have issue.

You're likely correct but it's possible that some of the big UK/US etc banks will be found to have "issues" during testing which can't be ignored and which have to be resolved to pass the health test or they would otherwise be told to "disappear" from the relevant region.

After all "troubled" UK banks like RBS have operations in europe.

The "health testing" might decide that banks like Barclays and the manipulations and proven fraud on stuff like Libor etc isn't that healthy for the european region.

For sure it's almost a certainty that they would resolve any issues reported (for the time being and along with bonuses all round for their trouble) even if it meant printing up some more bail out funds at taxpayers' and savers' expense.

Edited by billybong

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With their "health tests" maybe they're trying to prepare the way for their latest wheeze and contrivance.

http://

globaleconomicanalysis.blogspot.co.uk/2014/02/ecb-seriously-considering-negative.html

ECB Seriously Considering Negative Interest Rates

It sounds like some banks and maybe even some big banks might have difficulty in coping with it.

Con Carney announced more tests for UK banks just recently as well.

Edited by billybong

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