19 December 2013

グラハム・ビショップ：単一破綻処理制度は結局何も決まっていない

Summary

• Single Resolution Board and Fund (collectively, the Single Resolution Mechanism – SRM): The plan, agreed by Council yesterday, bears all the hallmarks of a political deal which does not take account of the brutal reality of the speed and ferocity of a banking crisis. As markets express their dis-belief, the SRM's lack of credibility may backfire and turn sentiment against the euro area.

• Only the ECB’s 'Comprehensive Assessment' and competition policy on illegal state aids will be in force during the peak period of tension – the 11 months until the ECB takes over direct supervision of 85% of the euro area's bank assets. All the other components of 'banking union' will not be operational during this period. So it should not matter if some parts become operational later than scheduled in the current rush. Ultimately, a postponed, yet manifestly more effective operation, could give the euro area a major gain in credibility.

• The governance of the SRM package may turn into a major trial of strength between the “European” Parliament in alliance with the “European” Central Bank against an arguably botched agreement amongst the Member States which may not be in the best interests of “Europe” as a whole. A 'no bad deal' policy could be attractive to the Parliament just ahead of an election campaign where the risk is of a low turn-out that could hand influence to those anti-Europeans who argue that the Parliament has no influence.

Saying ”no deal” on a botched SRM - which will not even be in force during the moments of peak stress - may be a good start for an EMU 2.0 functioning properly for the euro area as a whole. Inevitably, uncomfortable headlines will have to be endured initially, but markets may look differently at euro assets once the page of history has turned decisively.

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© Graham Bishop