Friday,
October 03, 2008
Italian Finance Minister Proposes US Type
Bailout Plan for
The
ANNOTICO Report
It
is incredible that the Wall Street and Banking firms who have cried out for a
FREE Economy, and have railed for Government to get out of the way of these
Entrepreneurs, so they could practice their Unbridled Mantra of Greed is Good,
should then when their over leveraged house of cards built from fabricated
documents crumbles, should INSIST that the GOVERNMENT SAVE them by buying their
Toxic Securities. INCREDIBLE!!
Bush
pushed Fear of Domestic Security to Launch an
unjustified War on
Bush
uses Fear of Economic Collapse to Buy up Financial Firms Losses, from
firms who Rejected Regulation.
Europe,
mostly wisely gave only lip service to Bush's
Schioppa Says EU Needs
"Big" Bank Bailout Fund
From
Reuters
By
Giselda Vagnoni and Gavin
Jones
Friday
October 3, 2008
*
Supervision must be reformed, co-ordinated more
closely
*
EU budget deficit limits should take back seat during crisis
*
ECB should keep rate policy separate from crisis management
ROME,
Oct 3 (Reuters) - As Europe debates how to handle the growing financial crisis,
a former European Central Bank board member and Italian finance minister
said it must urgently set up a US-style bail-out fund and unify its supervisory
mechanisms.
In
an interview with Reuters, Tommaso Padoa-Schioppa said
he hoped the leaders of
"(French)
President Sarkozy is to be praised, and I am very
hopeful the meeting will constitute the kernel of a European handling of the
crisis," he said in the interview conducted late on Thursday.
Padoa-Schioppa, who was
"Maybe
Europe is in better shape than the
He
strongly supported the setting up of a European fund to bail out banks in
difficulty,
a proposal reportedly aired by
"We
have seen injections of capital by the public sector in the
"And
it must be a European instrument, not a national one,
otherwise it will create a scenario of conflict."
He
declined to say how much public money should be poured into such a fund -- 3
percent of gross domestic product has been one suggestion -- but said it must
be large to be effective.
"To
overcome a crisis of confidence requires amounts that will reassure that there
is no scarcity of money," he said.
A
long-time advocate of fiscal rigour, Padoa-Schioppa said concerns about public finances had now
become secondary and suggested that during the crisis the terms of the EU's
Stability Pact on budgets could be effectively suspended.
"It
would be much more dangerous for any stability, including budget stability, not
to take extraordinary action to to solve the
crisis," he said, adding that
STATUS
QUO "UNACCEPTABLE, DANGEROUS"
Padoa-Schioppa, who has also served as head of
"The
status quo is unacceptable, untenable and dangerous; there is no single rule
for European banks," he said, noting the
"The
French supervisor oversees French subsidiaries, the German supervisor oversees
German subsidiaries and no-one has the full picture of the major EU-wide
banking groups. This supervision is neither 'super' nor 'vision'".
Padoa-Schioppa said the Financial Stability Forum headed by Bank
of Italy Governor Mario Draghi had produced some
worthy proposals but was not the right venue to propose the reforms he was
urging.
"If Europeans want to improve their cooperation that must
be decided among Europeans and not in a more global forum like the FSF."
Padoa-Schioppa praised the way the ECB had supplied markets with
huge liquidity injections while "holding the line" on monetary policy
by not lowering interest rates in the face of high inflation.
This
separation of policy was "very wise and probably shouldn't be
abandoned," he said.
Trichet said after the ECB left rates on hold at 4.25 percent on
Thursday that it had considered a rate cut, leading markets to price in
monetary easing as early as next month.
(Editing
by Ruth Pitchford)
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