AFP is reporting that all private savings deposits in German banks have been guaranteed by the German government. Currently breaking news on Sky News, so no link. Looks like the chain-reaction of Lenihan's decision has begun. Merkel is left looking like a hypocrite too...
At least she did not say "the economic fundamentals are sound"!
Countries with big banking sectors will have to think twice or impose some limits.
Expect a whole new standard in bank regulation
Reuters have it here:
German govt to guarantee deposit accounts-ministry | Markets | Bonds News | Reuters
The Finance Minister announced it, and another Minister announced it was unlimited.
Does it mean they're not guaranteeing deposits in German banks abroad? It sounds like it.
No, but worth quoting Merkel. "We have requested the commission to enter a dialogue with Ireland. It is important to have a balanced approach with no undue disadvantages for any member states."Originally Posted by essexboy
Today, she says "No citizen should fear for the safety of their savings." ( Germany guarantees private savings accounts )
Hypocrites, like the British. Lenihan was right, when the sh1t hits the fan, "ourselves alone".
I imagine they have to, otherwise the banks are still partially exposed and Ireland's apparent competitive advantage still partially exists.
I have no objections to deposit protection, but bailing out reckless lending should never be considered.
Most had no objection with Lenihan doing the former, it's the latter that has sacked off almost everyone.
It looks like the deposit protection is going Europe wide.
Thta is desperate news for Ireland.
Who is going to leave money in Irish Nationwide when you can get a German Government bank guarantee on your money at Deutsche Bank?
Its not about the deposits as such. The real killer would be if (when) they guarantee all Tier one and two capital.
Lenihan would argue that he hasn't bailed the spivs out, they're still in a pickle, it's just depositors and liquidity that have been protected. But you're right, once the others begin to follow Ireland's example, there is a risk that capital will flee to wherever they perceive to be the safest haven, particularly if they doubt Ireland's ability to honour such a pledge. If that sparks a panic flight in the weeks to come then the banks here are still in severe trouble. That's the gamble...
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