The Eurosystem is a commercial bank with no capital
Published on 22nd May 2023
The Eurosystem has expanded its operations well beyond what a central bank would have traditionally undertaken. It now owns assets that are not ‘central bank money’ definitionally. Assets have credit ratings as low as BB in the Standard and Poor’s system, which means […]
Bruges Group blog on EU breaches of regulation
Published on 18th May 2023
You will have seen that the EU and UK just announced a Memorandum of Understanding on regulatory matters to do with financial services:https://ec.europa.eu/commission/presscorner/detail/en/mex_23_2805The issues in my book – ‘The shadow liabilities of EU Member States, and the threat they pose to global financial stability’ […]
TARGET2 imblances are double what the ECB reports
Published on 12th May 2023
There has been long and ongoing debate about the nature of the sizeable loans and deposits that the Eurozone national central banks (NCBs) run with one another within the TARGET2 payment system. The debate has overlooked that the balances are nearly double what the […]
ECB programmes have created a major risk for Eurozone member states
Published on 11th May 2023
The programmes of the European Central Bank (ECB) are extensive, and involve greater risks than the ECB can bear, it being very thinly capitalized. Even modest losses on its programmes would require it to be recapitalized by its Eurozone shareholders – […]
Net Zero is a perfect cover story for the EIB and EIF
Published on 25th April 2023
Net Zero is proving to be a good cover story for the European Investment Bank Group to create huge financial liabilities for the EU taxpayer. The amount looks set to exceed €1.2 trillion by the end of the current EU […]
Misleading account at the European Stability Mechanism
Published on 24th April 2023
The European Stability Mechanism is the main bailout mechanism behind the euro. Croatia recently joined it upon adopting the euro. The ESM uses two accounting tricks to make it appear larger and more robust than it actually is, disguising that it lacks the firepower to […]
EU supranationals harbour major risks for member states
Published on 21st April 2023
The structures of the EU and Eurozone have allowed the creation of a series of supranational entities that have taken on debts whilst having little financial strength of their own: their creditworthiness depends on guarantees or capital calls from member states, without the extent […]
Rating agencies discriminate against the UK
Published on 18th April 2023
Public credit rating agencies have not been even-handed in their treatment of the UK compared to EU member states, given the large shadow debts and contingent liabilities that weigh on the latter.
This is explained in the newly-released book ‘The shadow liabilities of EU Member States, and […]
Public credit rating agencies over-rate EU issuers
Published on 16th April 2023
The public credit ratings of EU/Eurozone member states are inflated, because the credit rating agencies have not factored in the significant shadow debts and other financial liabilities bearing down on the respective member state’s debt service capacity. Total financial liabilities are much higher than these […]
Germany cannot afford all the EU/Eurozone debts
Published on 15th April 2023
Global debt markets appear comfortable to absorb all of the bonds issued by the European Union for its €750 billion Coronavirus Recovery Fund on the basis that ‘it all tracks back onto Germany’. This is true: the guarantee structure behind the EU’s debts makes each […]