tag:blogger.com,1999:blog-3120478448417742445.post2724183270363930872..comments2024-03-24T06:35:14.281+00:00Comments on The Portuguese Economy: CGD: Privatization or Resolution?Editorhttp://www.blogger.com/profile/16779405217168307855noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-3120478448417742445.post-26457005655750087512011-04-13T23:37:41.529+01:002011-04-13T23:37:41.529+01:00PS:
And is not supported by the quoted document by...PS:<br />And is not supported by the quoted document by german economists. They don't refer on that matter to Portugal or any other specific country, or even to Debt restructuring as being a good solution for the country involved. Their concern is, as would be expected, with the creditor well being, that is, with themselves.Anuneshttps://www.blogger.com/profile/12666324263807272922noreply@blogger.comtag:blogger.com,1999:blog-3120478448417742445.post-886699086872204192011-04-13T23:18:45.141+01:002011-04-13T23:18:45.141+01:00Believing that there would be any economy left aft...Believing that there would be any economy left after a 75% hair-cut on Portuguese Public Debt, not to mention Private Debt, is certainly far beyond wishfull thinking.<br />It is not supported by economic litterature, and it is not supported by the numbers involved.Anuneshttps://www.blogger.com/profile/12666324263807272922noreply@blogger.comtag:blogger.com,1999:blog-3120478448417742445.post-84169438002778301272011-04-06T13:54:02.348+01:002011-04-06T13:54:02.348+01:00Portugal may need a bank special resolution regime...Portugal may need a bank special resolution regime (SRR) – it certainly looks like it may and even if did not need one it should have resolution built into its central banking framework anyway. Everyone should and perhaps by the autumn the European Commission will have (as promised) come up with some kind of community-wide framework directive focusing on cross-border aspects of special resolution particularly. However even if SRRs are being introduced after the fact to deal with the banking crises (UK, Denmark, Germany, Ireland) that are at the heart of the GFC or where already in place amended (as in the US), they should not be seen in such narrow terms as simply providing a mechanism for rapid liquidation outside the normal rules of commercial insolvency law (which they certainly must). The other point (equally important) is that SRRs must also sit within a philosophy of central banking and oversight of commercial banking that is rooted in and gives operational effect to structured early intervention and resolution (SEIR) as advocated by George G Kaufman and others over many years. The point of SEIR is that it offers those responsible for oversight with an approach to their duties that makes banks safe to fail as opposed to falling ad hoc into the TBTF trap. A perhaps useful survey of the issues involved in banking resolution may be downloaded from here while a recent central banker’s perspective on what SRR entails may be found here. There is further the question of what kind of banks and banking do we want? Here the whole debate about narrow banking, utility banking, casino banking and so on comes into play – all of which is very much live in the UK at present courtesy of the Vickers commission. John Kay gives us a good overview from a pro-narrow banking perspective here.Unknownhttps://www.blogger.com/profile/10404348759897438522noreply@blogger.com