Big Government: European Banking Union

First A Monetary Union – Now A Banking Union

If a monetary union does not work in times of a deep recession, would a banking union fare any better? Just the terminology does not sound reassuring.

A Common Rescue Fund To Bail Out Failing Banks

Without knowing all the details, it appears official proposals for a European banking union include a common rescue fund financed by levies on banks to assist banks in future emergencies.

Media commentators praised this common fund as it would alleviate tax payers from paying for future bail outs.

Such a common fund is a stupid idea:

a) It implies too big to fail continues, whereas it should be abolished

b) It incentivizes banks to be more risky

c) In reality, taxpayers will pay for this fund anyway in form of higher fees etc.

d) Banks are financial intermediaries in the economy. Why would only banks have to contribute to such a fund?

If such funds were a good idea, free markets would have created them voluntarily a long time ago.

Socialism is dead, long live socialism!