European banks ‘might leave’

Just a very quick note.

The Guardian and other papers peddling the  “European Banks might leave for pastures greener if EU rules on pay, risk taking and bonuses are enacted.”

Could I just point out one thing.  European banks CANNOT go anywhere so long as they depend for their very survival on their respective governments continuing to bail them out.  Not because they are restrained by any moral sense nor because there is any law detaining them.  But because any country who they would like to move their business to, would have to also be willing to take over from us the vast cost of bailing them out and insuring their rotten assets.  Is Singapore, or China going to say, “Sure we’d love to have you and of course we’ll be thrilled to take on the 200 and odd billion in asset insurance. No, really, come on in!”

I don’t think so.

The banks can DO more business out there. And they can continue to avoid, sorry , minimize tax exposure here. Hey if its good enough for Lord Ashcroft then its good enough for the banks.

BUT if the banks start to whole sale move operations, legal and tax base, then even our craven governments will, I think, draw the line.  If they don’t then it is, for me, time for revolution. In the street. Sounds silly but I think at that point we would have no choice.

But it won’t come to that, I don’t think.  This is stupid journalists either not thinking it through or not caring to because it makes a good story.

If the banks tried to blackmail European governments and said, “We’re moving”, the government’s simply say, “Then find a new insurer by Monday because ours stops at 9am sharp.”  And that would be the end of that fantasy. Without our government’s asset insurance, bond and asset buying and general investment,  it would be instant death for the banks.  The threat is empty piffle.

How long would RBS last? How long would Deutsche or Commerzbank, or Unicredit or any of the other big banks?  Do you think the German government would stand with its thumb in its mouth while Deutsche moved? Or do you think FinMin would suddenly ‘find’ some reliable figures on the real value of the bank’s assets and its actual exposure to certain government debts? Or the actual counterpary risk of its CDS exposure?   DO you think the ECB would wave a fond bye bye and call after them,”Don’t worry about the toxic worthless crrap you left with us, we’ll look after it for you”?

You cannot continue to hide a mountain of toxic and marked to model lies, if you have to get then out of one hiding hole in order to transport them to a new one in a new jurisdiction.

Let us not get so frightened of the banks that we jump every time they pull a face or say boo!

We can enforce regulation upon them, no matter how big they are.  If we couldn’t, they wouldn’t be crying about it so loudly. As long as our government’s have the stomach and resolve to do so, they can.  If they don’t, but chose instead to allow banks to move to unregulated pastures to do business and pay taxes, while expecting us to continue to bail them out, then we have, at that point, to burn them all. Every last one.  I will NOT become an out-sourced, off-shore, debt slave. Not in this life.