The Eurozone’s common currency plunged to its weakest point in two-and-a-half years as investors fled the Eurozone’s sagging economy and the coronavirus scare and took refuge in the dollar.
The dollar has been 2020’s strongest currency among the G10 group of nations.
The euro sank even further Thursday afternoon when the Trump administration said it believes the number of virus cases in China has been “severely under-reported.”
PUBLISHER’S NOTE: The euro’s weakness is tied to the zone’s poor long-term economic performance. The virus scare is only the sour cherry on top of the deeper negative trend.
Failed Banks: Whose Rules?
Europe needs clearer rules around winding down failed banks after favoritism was charged in the €3.6-billion bailout of Germany’s Nord LB and other high-profile cases.
Elke Konig, head of the EU’s agency dealing with bank failures, has asked for clarity to avoid “perceived inequality of treatment” in the process.
The agency is called the Single Resolution Board and was created five years ago to try to make sense of a hodgepodge of national rules governing bank failure, to set up a uniform process across the EU, and to reassure depositors who bank across national borders.
Only the failure of Spain’s Banco Popular has been dealt with by the board according to its established processes.
Many other rescues or closures have been handled by national agencies without following the EU board’s procedures.
Konig has asked for more clarity about when national bank regulators can step in with deposit guarantees and other measures, supplanting the EU’s rules.
TREND FORECAST: Nothing of any significance will be employed to deal with favoritism and disparity within the banking system or the general economy that passes laws and takes measure to protect “too-big to fail” banks and businesses at the expense of the general public. Indeed, it is a driving force of populist/anti-establishment movements across the globe.
