The European Central Bank (ECB) currently oversees monetary policy, mainly interest rate adjustments, for the eurozone. As the financial crisis has spread, they’ve adjusted policy actions to stem the spread to other eurozone countries.
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New York, NY (PRWEB) September 25, 2012
In a recent Investment Contrarians article, editor and financial expert Sasha Cekerevac reports that, this past weekend, some cracks appeared in one of the plans for the eurozone involving having a single bank supervisor overseeing the rules and regulations for all of the continent’s banks. According to Cekerevac, several eurozone countries are now voicing concerns that there’s not enough time to overcome key issues (with the initiative scheduled for January 1, 2013), meaning that the financial crisis is more likely to spread before differences are resolved.
“The European Central Bank (ECB) currently oversees monetary policy, mainly interest rate adjustments, for the eurozone,” explains Cekerevac. “As the financial crisis has spread, they’ve adjusted policy actions to stem the spread to other eurozone countries.”
With so many vastly different eurozone nations, this has not been an easy task, says Cekerevac. However, he notes that one question arises: can the ECB take on the additional duties of the banking supervisor and ensure its independence?
Currently, in addition to the amount of power that will be given to the ECB, Cekerevac reports that the main points of dissent concern the overseeing of non-euro eurozone countries, which do not have any vote in the matter.
“Under the current rules, for non-euro countries within the European Union (EU), this would mean that the funds of citizens and taxpayers in these countries would be used to bail out banks in other euro countries, the former getting no vote or say in the process,” Cekerevac points out. “This type of policy initiative is extremely unpopular and is one of the reasons that the start date is being sited as far too soon.”
Considering how tenuous the financial crisis is within the eurozone and the significant differences in ideas regarding the creation of regulatory bodies, Cekerevac finds it hard to believe that these problems will be solved in the short term, as the eurozone nations have vastly different ideas of how they fit within the EU.
While the ECB is stating that it’s too big to fail, real questions are arising that suggest it’s too big to save, Cekerevac concludes.
To see the full article and to get a real contrarian perspective on investing and the economy, visit Investment Contrarians at http://www.investmentcontrarians.com.
Investment Contrarians is a daily financial e-letter dedicated to helping investors make money by going against the “herd mentality.”
The editors of Investment Contrarians believe the stock market and the economy have been propped up since 2009 by artificially low interest rates, never-ending government borrowing and an unprecedented expansion of our money supply. The “official” unemployment numbers do not reflect people who have given up looking for work and are thus skewed. They believe the “official” inflation numbers are also not reflective of today’s reality of rising prices.
After a 25- to 30-year down cycle in interest rates, the Investment Contrarians editors expect rapid inflation caused by huge government debt and money printing will eventually start us on a new cycle of rising interest rates.
Investment Contrarians provides unbiased research. They are independent analysts who love to research and comment on the economy and investing. The e-newsletter’s parent company, Lombardi Publishing Corporation, has been in business since 1986. Combined, their economists and analysts have over 100 years of investment experience.
Find out where Investment Contrarians editors see the risks and opportunities for investors in 2012 at http://www.investmentcontrarians.com.
George Leong, B. Comm., one of the lead editorial contributors at Investment Contrarians, has just released, “A Problem 23 Times Bigger Than Greece,” a breakthrough video where George details the risk of an economy set to implode that is 23 times bigger than Greece’s economy! To see the video, visit http://www.investmentcontrarians.com/press.