Το Χρεος / ΑΕΠ και τραπεζες στην ΕυρωΚομμουνα

Το χρεος/αεπ εχει ταβανιασει…οπως ο Σαμαρας.
Sovereign debt jumps. But alarm bells should have been ringing even before that. In the third quarter of 2012, the overall government debt-to-GDP in the Eurozone surpassed 90% for the first time ever, as shown in the graph above. Why is this number important? In “Growth in a Time of Debt”, after analyzing 3,700 annual country data points going back centuries under the most varied macroeconomic conditions (and the occasional spreadsheet error ;), Carmen Reinhart and Kenneth Rogoff found that in countries which are above that 90% threshold GDP growth is generally weak. In other words, from that point on the odds are firmly stacked against us seeing the growth rates necessary to smoothly reduce debt loads that even the BIS agrees are problematic. And several Eurozone countries are way past that level now.
And who were the buyers of bonds in some of the most indebted periphery countries? In April 2012 Bloomberg reported that Spanish, Italian and Portuguese banks increased their holdings of domestic sovereign debt by very significant double digits, mostly financed by the ECB. Much to the chagrin of bond vigilantes, the ensuing decline in the bond yields of these countries virtually up until today might not be a sign of strength and stability – but rather an impressive feat of financial engineering.
Οσον αφορα στις Ευρωτραπεζες της ΕυρωΚομμουνας :
Οι ΓερμανοΓαλλικες θελουν 5 πλασια ΚΕΦΑΛΑΙΑ απ οσα δειχνουν να εχουν!
Where’s the capital? Another eye-opener came over a year ago. In April 2013, Jakob Vestergaard and María Retana at the Danish Institute for International Studies published “Smoke and Mirrors: On the Alleged Recapitalization of European Banks”, a report partially funded by the World Bank. The title says it all. According to the authors, by using broad capital measures based on risk-weighted assets European banking regulators have overstated the banks’ soundness and resilience in their stress assessments. Accordingly, “recent increases in risk weighted capital ratios have been little more than a smokescreen.”
By focusing on leverage ratios instead, the authors reached some interesting conclusions. The least well-capitalized banking sector among the larger Eurozone countries is not the Spanish or Italian… but the German, closely followed by the French! According to their estimates, a five-fold increase in equity capital is needed in order to reach “adequate” levels of soundness. It is well worth reading the entire report, including the discussion on why regulators seem to be consistently behind the ball on bank recapitalization.
Δημητρης Καμμενος
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