Europe Is Breaking Up Its 'Too Big to Fail' Banks

The American government is doing everything it can to avoid breaking up the too big to fails, even though there is absolutely no reason not to (see this and this).

As Reuters columnist Rolfe Winkler wrote yesterday:

The new legislation unveiled by Representative Barney Frank doesn’t end “too big to fail” — it codifies it. It also puts taxpayers on the hook for a large portion of future bailouts.

But Europe is in the process of breaking up:

• Lloyds (LYG)

• Royal Bank of Scotland (RBS)

• Northern Rock (NHRKF.PK)

• ING (ING)

• And potentially other banks

What's the matter with the Yanks?

Comments

[the gerald:]

what about DB, barclays, bnp,credit agicole, ubs, soc. gen, stb, unicredit, credit suisse, hbos? the idiot EU is transfering all the rbs ing, lloyds stuff over to the local(?)above mentioned banks.

no other banks can afford to buy the big chunks. the list of the top 25 will shuffle a bit. all above mentioned are too big to fail.

neelie has an adjenda, i don't understand what it is.

Oct 29 08:36 AM

[Ferdinand E...:]

Great question author - by which I mean "What's the matter with the yanks?"

My answer to that is that the dumbest man in the United States is smarter than Gordon Brown and the morons working for and with him..

Oct 29 09:47 AM

[De Graaf:]

Neelie's agenda is very simple. That is to avoid monopoly market shares and to allow free market capitalism to benefit the European markets and therefore its people.

America could actually learn something from its forefathers...
End the phony economy in the US. Start reasoning for the taxpayer or continue to destroy the dollar, increase moral hazard and top the peak for a bigger economic collapse,...a currency crisis.


On Oct 29 08:36 AM the gerald wrote:

> what about DB, barclays, bnp,credit agicole, ubs, soc. gen, stb,
> unicredit, credit suisse, hbos? the idiot EU is transfering all the
> rbs ing, lloyds stuff over to the local(?)above mentioned banks.
>
>
> no other banks can afford to buy the big chunks. the list of the
> top 25 will shuffle a bit. all above mentioned are too big to fail.
>
>
> neelie has an adjenda, i don't understand what it is.

Oct 29 09:54 AM

[koos:]

In the United States there is an animal called a LOBBYIST. This wild beast has huge cash reserves behind it and uses its

Oct 29 10:06 AM

[James Lewis:]

All the banks listed above are UK Banks that are insolvent.
Not just insolvent, but with assets 50-75% than the toxic liabilities are their balance sheets. They are being broken up and sold off to re-distribute risk within the system. The agenda is huge. I think by doing this they are trying to eradicate a paper trail on the true level of writedowns necessary because of course if they did so. The UK government would be caught with its pants down, as the toxic liabilities on the books are worth 200% of GDP.The UK would not even be able to go to IMF for a loan of that size. We would have a huge sovereign default in UK which would destroy value of holdings at European Banks and Amercian Banks. Long Term Capital Management would like a bank holiday compared to the crisis this would create.

It puzzles me why so many educated people do not understand that the banking system toxic assets far outweigh the GDP of almost every government. The system is Insolvent, this is why we are printing money through QE.

Oct 29 10:42 AM

[Old Trader:]

While I'd be the first to admit there's no shortage of problems with the EU, in terms of its governing structure, etc., I agree with the author; they're ahead of the curve on this issue.

Oct 29 10:42 AM

[User 496459:]

ING is neither insolvent nor a UK Bank


On Oct 29 10:42 AM James Lewis wrote:

> All the banks listed above are UK Banks that are insolvent.
> Not just insolvent, but with assets 50-75% than the toxic liabilities
> are their balance sheets. They are being broken up and sold off to
> re-distribute risk within the system. The agenda is huge. I think
> by doing this they are trying to eradicate a paper trail on the true
> level of writedowns necessary because of course if they did so. The
> UK government would be caught with its pants down, as the toxic liabilities
> on the books are worth 200% of GDP.The UK would not even be able
> to go to IMF for a loan of that size. We would have a huge sovereign
> default in UK which would destroy value of holdings at European Banks
> and Amercian Banks. Long Term Capital Management would like a bank
> holiday compared to the crisis this would create.
>
> It puzzles me why so many educated people do not understand that
> the banking system toxic assets far outweigh the GDP of almost every
> government. The system is Insolvent, this is why we are printing
> money through QE.

Oct 29 10:53 AM

[User 382902:]

not sure why you would ask a question when the answer is so obvious....nothing is wrong with the Yanks...just that too big to fail own the government in Washington and all the politicians are in their back pocket...so there....

Oct 29 11:23 AM

[bobbobwhite:]

How much will Goldman pay our crooked gov't officials to NOT consider doing the same thing? And, JPM, and BofA, and MS.............

Not to the taxpayers, but to them personally. Count on it.

Oct 29 12:37 PM

[GotLife:]

Senator Charles Shumer in the back pocket of banks or Wall Street? I was always believing he was solidly behind the "middle Class."


On Oct 29 11:23 AM User 382902 wrote:

> not sure why you would ask a question when the answer is so obvious....nothing
> is wrong with the Yanks...just that too big to fail own the government
> in Washington and all the politicians are in their back pocket...so
> there....

Oct 29 02:21 PM

[Gross Profits:]

Is the US too big to fail?

Oct 29 03:53 PM

[bob adamson:]

The US and EU need to develop long rang policy in concert about the nature and form of the investment banking industry and of the banks and near banks that form that industry. The ad hoc restructuring that the EU is undertaking now is only a first step.

Oct 29 07:26 PM

[Moon Kil Woong:]

t is hard to argue any bank is too big when you have the Federal reserve around. They are the single biggest systemic risk around.

Anyway onto other banks, implementing Glass Stegall and enforcing confict of inteterest and anti-trust laws would prevent a lot of this mess. That's why they don't want it.

Also, shouldn't someone monitor leverage and derivatives exposure? What's the use of regululating too big to fail banks if you don't make common sense rules dealing with the underlying financial instruments that caused this recession in the first place? Either get serious about fixing things or just admit your paid off by banks and don't give a damn about America or it's citizens. It's that simple.

This bill is more tokenism and clever ways of making sure TARP automatically happens the next time banks fail so legislators don't have to vote on it.

Oct 30 02:05 AM

[jambo:]

On Oct 29 09:47 AM Ferdinand E. Banks wrote:

> Great question author - by which I mean "What's the matter with the
> yanks?"
>
> My answer to that is that the dumbest man in the United States is
> smarter than Gordon Brown and the morons working for and with him..

Hah! While I doubt it is true per se, still the point is well made. It doesnt appear to be rocket science (or economics) happening over there financially speaking. The English are much smarter than that BUT WE ARE much smarter than what is happening here as well!

Oct 30 02:03 PM