Today, European leaders meet for their #EUCO meeting. A topic on their agenda is a potential banking crisis #SVB #CreditSuisse.
They need to urgently fix the EU Banking Union and grant the ECB more supervision to keep Europe innovative and sustainable!
Here is why👇
🐦🔗: https://n.respublicae.eu/d_boeselager/status/1638845263396630528
The crisis of confidence started with #SiliconValleyBank and their shitty decisions on risk management - and it now crossed the Atlantic🙃
Last weekend, Swiss regulators forced UBS to take over #CreditSuisse, which was one of the 50 biggest banks in the world in assets! /2
🐦🔗: https://n.respublicae.eu/d_boeselager/status/1638845265972002819
As you read this, the lack of trust is spreading: the European Bank Index (value of bank stocks) is down 17% in just two weeks! 📉
Policy makers everywhere are waking up to the risks of a financial crisis and the resulting credit crunch.
Why should EU leaders care? /3
🐦🔗: https://n.respublicae.eu/d_boeselager/status/1638845268207566851
Banking crises lead to a credit crunch.🫗
People withdraw money from banks they think are not stable or ask for higher interests.
This increase in costs for banks reduces their willingness to lend money to home-buyers, entrepreneurs & companies, which equals less investments. /4
🐦🔗: https://n.respublicae.eu/d_boeselager/status/1638845270841589761
In short: If we don't restore confidence in European banks, we will see less investments into the green transition, digital technologies and research.
In Europe, the best way to restore trust would be to complete the banking union 🏦🇪🇺👰♂️🤵! /5
🐦🔗: https://n.respublicae.eu/d_boeselager/status/1638845273668562947
Stupidly, national interests still prevent us from completing the EU banking union.
We don't have a European deposit insurance scheme (Germany stopped it…), meaning that national rules still apply for the part of your savings that are guaranteed in case your bank goes bust🤯 /6
🐦🔗: https://n.respublicae.eu/d_boeselager/status/1638845275815960576
The European Central Bank has the prerogative to supervise and wind down the ~110 largest Eurozone banks, however its powers don't extend to mid-sized banks (<30bn EUR in Assets).
It’s high time to change this. Almost everyone (except national banking lobbyists) agree. /7
🐦🔗: https://n.respublicae.eu/d_boeselager/status/1638845277833502721
As ECB Pres @Lagarde this week: “I’m just curious on what keeps us from moving forward [on banking union]”
It's high time for national leaders to wake up: They need to decide today to grant the ECB more banking supervision powers.
Fix it today, before we run into another crisis!
🐦🔗: https://n.respublicae.eu/d_boeselager/status/1638845280568188928