Said this learned banking and finance specialist at Global Macro Advisors:
Things could still get much worse, and soon. To halt the decline, European governments should follow Ireland's lead and make an explicit guarantee of deposits to end potential distrust among depositors. They should bite the bullet and temporarily guarantee certain bank debt obligations to reassure banking counterparties.Can it really be, one wonders, that Mr Harrison has not heard of Directive 97/9/EC, to which we referred this morning? Can he really not know that the action taken by the Irish government was illegal under EU law?
One really does wonder because, even for Guardian readers, one cannot imagine such a great sage advocating such a course if he really did know or believe it to be illegal – or the paper actually printing it.
No doubt one of the reasons why the "elephant" lives such a charmed life is because it simply is not mentioned in polite company. Thus did the BBC manage to report the "cap" on Northern Rock lending during its lunch-time bulletin and on its website without mentioning the EU.
On Thursday, reported the BBC, Northern Rock had said that it had seen a "sizeable inflow" of deposits in recent days owing to financial turbulence, the Beeb then informing us that, "It must cap its market share of UK retail deposit balances at 1.5 percent … This commitment was made as part of the nationalisation deal."
Er … this "commitment" was a specific condition imposed by EU competition commissioner Neelie Kroes as part of her directorate's "authorisation" of state aid to the bank, as set out in its press release of 2 April this year.
Even the BBC, however, is going to have some difficulty explaining away why it is, when parliament has not been recalled to discuss the financial crisis, Gordon Brown is rushing off to Paris this weekend to meet EU president Nicolas Sarkozy to do precisely what parliament has not yet done - discuss the financial crisis.
The interesting thing about the BBC though, is that while it seems reluctant to tell us how much power the EU already has, its airwaves are open house to paid advocates demanding more. Thus, on the PM programme it gave time, unopposed, to a spokesman from the EU commission-funded Centre for European Policy Studies arguing for a European solution to the financial crisis.
One can perhaps believe of Mr Harrison that he is truly ignorant of EU involvement in banking regulation. But the BBC? Its refusal on the one hand to acknowledge the major role of the EU in our affairs - and how much damage it has done - while happily promulgating EU-funded propaganda, really cannot be accidental.