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Comment by glenndebacker | Hacker News Reader

"The Euro just seems like a complete failure. Giant economies are limping along with 20% unemployment, unable to recover 8 years after the recession. In contrast the US has managed an OK recovery, now closing in on full employment."

You are aware that the problem with the EU banking reforms (or lack off) was also that the UK didn't wanted stricter rules with regards of the city of London... ? They even wanted an exemption.

In this regards I find it really intellectual dishonest that over the pound they are pointing fingers to the failure of Europe as they were part of the problem to begin with.

I do hope that from the moment that the UK stops dragging their feet and leave the EU it will be able to make swifter decisions instead of losing energy in constant oppositions.

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There is no intellectual dishonesty. Fixing the Eurozone's banking problems (assuming you believe those regulations would do the trick) is not the UK's problem and it's not the UK that blindly insists on a one-track, one-speed Europe: it's Germany and France that are wedded to that concept. They could easily have introduced new rules only in the countries that wanted them.

But regardless, the problem in Italy is simply that not enough people are paying back their loans. That's not something bank regulation is going to fix. Banks make loans, that's kind of what they do, and if a country collectively gets too bad at paying back those loans then it's gonna have a banking crisis.

> But regardless, the problem in Italy is simply that not enough people are paying back their loans.

Bingo! Guy who "owns" apartment upstairs from ours in Padova stopped paying for it several years ago. He doesn't pay the apartment fees either, meaning we have to pay for him. He had his furniture and other stuff repossessed a few years back. In short, as far as we can tell, he's insolvent. And yet, he's still there, and the bank won't take action against him, because if they do, then it shows up as 'bad debt', rather than 'temporarily in arrears' or whatever.

> Banks make loans, that's kind of what they do,

How naive. Banks have to take collateral and give loans only to people/companies that have good track record. What they did is to give loans to people who could not pay back, which is a fatal mistake for a bank.

give loans to people who could not pay back

The people they lent to seemed like reasonable credit risks at the time - this isn't the same situation as US "subprime". Fundamentally there's no way to know whether a lender will be able to pay back, you can only make statistical guesses at the time based on limited information.

There's an additional problem in that NPL levels depend on the state of the economy as a whole, which can become a self-fulfilling prophecy.

(See e.g. http://english.mps.it/media-and-news/press-releases/2016/Pag...

Edit: MPS isn't even loss-making, at the moment. The cliff is not so close. http://markets.ft.com/research/Markets/Tearsheets/Financials...

If you can get a country to likely bail you out, then "risky" loans are no-brainers. Because you externalize risks onto taxpayers.

Example: why does Obama get heavy support from the finance industry?

So what you are saying, is that the problems in Greece are down to the UK? I think you may want to rethink how you perceive your world.

The UK has nothing to do with reforms concerning the EURO. That's up to France and Germany and the EU Central Bank.

The biggest problem is this. The UK is now leaving and taking a pretty big economy with it. Those payments the UK makes is going too.

The Germany Economy can't keep bailing out the poorer nations in the EU alone.

The market is now eyeing up all the banks in the EU countries and are sharpening their knives to do shortages.

I'm just waiting for 1 bank to need a bailout and then you'll see a long list.

Who is going to foot this bill, France, Germany, Finland? What conditions are they going to impose.

Is Italy or another country (Spain?) going to see Greece style sanctions?

Once this happens, I think you'll start to see other exit musings in other countries and it'll be the beginning of the end!

"So what you are saying, is that the problems in Greece are down to the UK? "

The problems in Greece where mostly introduced by abuse of the Greeks themselves. That is the small detail that mostly is left out.

"The UK has nothing to do with reforms concerning the EURO. That's up to France and Germany and the EU Central Bank."

The OP is talking about the measures the US has taking regarding the banks. We are taking about the reforms of the banks nothing regarding the currency. The thing the UK wanted an exemption for, the reason why a lot of measures couldn't be taken... .

"Those payments the UK makes is going too."

Yeah because that access to the single EU market will come for free... .

"Once this happens, I think you'll start to see other exit musings in other countries and it'll be the beginning of the end!"

What is that with that British obsession that some have with destroying Europe and bring instability to the continent?

  > Yeah because that access to the single EU market will come for free...

If the choice is between tariffs paid by importers, and danegeld paid by taxpayers, I know which I'd pick.

That's not true. I have just read an interview with Juncker and Van Rompuy where they clearly stated that the UK didn't slow down the decision process and actually implemented directives faster than most countries.

I am not pro UK in the EU though.

The EU and Eurozone are two different entities. The UK is not part of the Eurozone.

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