ECB’s Draghi Calls for Centralized Banking Control

European Central Bank head Mario Draghi says Europe needs a centralized way of forcing its troubled banks to restructure and argued that recent cases have shown national regulators are choosing "the worse possible way" to help their banking sectors by delaying tough decisions.

THE European Central Bank was playing away today, in Barcelona rather than Frankfurt, but the result would have been the same wherever its governing council met: a no-change score, with the main policy rate left at 1%.

  The EU Crisis went into overdrive in the spring of 2012 when the Spanish banking system as a whole nearly collapsed. Having pumped €1 trillion into EU banks via its LTRO 1 and LTRO 2 programs in December 2011 and February 2012, the European Central Bank found itself facing a problem far greater than Greece (Spain’s banking system is over €3.7 trillion assets in size, compared to Greece’s  €338 billion) and on the verge of losing control of the entire system.  

The bank also lowered its benchmark interest rate to 0.50% from 0.75%, the first cut in 10 months. Worries about eurozone persist, with data showing manufacturing activity across the 17-nation bloc shrank in April. The ECB also extended its cheap loans to banks until at least July 2014, reports The BBC. Official data released on Tuesday showed record high unemployment in the eurozone, and inflation at a three-year low.

Once nannycrats grab on to an idea, they never relinquish it. Eurobonds are the perfect example.  Many other idea float around despite numerous objections in key places. Some of these ideas involve creation of more commissions and more working groups. Here is a sampling of commissions and groups that I am aware of.

After insisting no bailouts would be needed, Spain to spend billions on bank rescue Spain is planning a state bail-out of Bankia, the country’s third biggest bank by assets, in a move likely to involve the injection of billions of euros of public money into the troubled lender.