EU Commission says taxpayer bailouts should go to banks rather than governments

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Above, Chief Parasite of EU Commission Barroso, ap

5/30/12, "European Commission suggests bank bailouts," BBC

"The European Commission has proposed bailing out ailing banks directly rather than helping governments.

"To sever the link between banks and the sovereigns, direct recapitalisation... might be envisaged," the commission said.

"Flexibility and speed are of the essence," commission head Jose Manuel Barroso said.

The European Union's executive body also pushed for more integration through a "banking union"....

The commission also seemed to back the idea of eurobonds, which would be debt jointly issued by all 17 countries in the eurozone."...

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10/12/2008, "Europe follows Brown plan for survival as EU bank bail-out plan is agreed," UK Guardian

"Germany, France, Italy and a further 12 European countries last night unveiled a "comprehensive" plan for salvaging their banking systems from potential ruin, as panicked European leaders met to try to ward off more financial meltdown before the markets reopen today."...

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In 2011, "The Federal Reserve...agreed to join with other major central banks to lend hundreds of billions of dollars to major European banks."

(Translation: US taxpayers have been "volunteered" to transfer their lives to bankers and cronies.)

10/6/11, "And So It Begins – The First Major European Bank Has Been Bailed Out And More Bailouts Are Coming," theeconomiccollapseblog.com

"The first major European bank bailout of 2011 has now happened....So if nations such as Italy or Spain start collapsing, will the U.S. Federal Reserve step in to help bail them out?...

The sad truth is that the Federal Reserve can do pretty much whatever it wants and nobody can stop them.

As I wrote about the other day, the Federal Reserve has agreed to join with other major central banks to lend hundreds of billions of dollars to major European banks in October, November and December.

As the past few years have shown, wherever big, global banks are in trouble, the Federal Reserve is sure to step in and help."...

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Ben Bernanke speaks about "swap lines" we give European banks, March 21, 2012:

"Actions Taken by the Federal Reserve

"To help calm dollar funding markets and support the flow of credit to U.S. households and businesses, the Federal Reserve acted in concert with major foreign central banks to enhance the U.S. dollar swap facilities that were originally put in place during the global financial crisis and reestablished in May 2010. Use of the reestablished lines was limited until late last year. However, in late November, the Federal Reserve agreed with the ECB and the central banks of Canada, Japan, Switzerland, and the United Kingdom to extend the swap lines through February 2013 and to reduce their pricing, from a spread of 100 basis points over the overnight index swap rate to 50 basis points.¹

The lower cost to the ECB and other foreign central banks enabled them, in turn, to reduce the cost of the short-term dollar loans they provide to financial institutions in their jurisdictions. As a result, usage of the swap line increased considerably, peaking at $109 billion in mid-February. The expanded use of the swap lines has helped to ease funding pressures on European and other foreign banks, lower tensions in U.S. money markets (in which foreign banks are major participants), alleviate pressures on foreign banks to reduce their lending in the United States, and boost confidence at a time of considerable strain in international financial markets. In recent weeks, as market conditions have improved, usage of the swap lines has fallen back to about $65 billion....

U.S. financial institutions do have some gross exposure to potential losses arising from sales of credit default swap (CDS) protection referencing European sovereign debt. However, for the large U.S. dealer banks, these sales have been more than offset by purchases of protection, which would imply that in the event of a sovereign default, U.S. financial institutions would be net recipients of CDS payouts. These positions still carry some risk in that some U.S. banks' counterparties might conceivably fail to make good on their obligations, but such risk is mitigated by the fact that the counterparties to large U.S. dealer banks for sovereign CDS trades are dispersed, primarily across large financial institutions. ...

Although U.S. banks have limited exposure to peripheral European countries, their exposures to European banks and to the larger, "core" countries of Europe are more material. Moreover, European holdings represented 35 percent of the assets of prime U.S. money market funds in February, and these funds remain structurally vulnerable....

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