FT Alphaville (which is generally free) has an article on an Italian bank that has gone bust entitled ‘The curious case of Banca Carige’.
It certainly is – the European Central Bank (ECB) is acting as a receiver!
The ECB assumed new powers in 2014, through the implementation of the Single Supervisory Mechanism (SSM), which “supervises” significant banks in the eurozone. Previously, this was the domain of national central banks.
This is, as Alice in Wonderland would have it, curioser and curioser.
Whilst it has chosen not to use it in Greece, is this now the ECB’s secret weapon – any Eurozone bank in difficulty will have the ECB appointed as the receiver? Will that include DeutscheBank when – as seems likely – it eventually wobbles?
To have European Banking in the hands of the receivers looks rather like a cunning plan…
I’m not a Euro fan but for the sake of stability let’s hope it works.