European Crisis Explodes: Italy Bank Bailout Aims to Avoid “Panic, Run On Deposits”

by | Jul 1, 2016 | Aftermath, Commodities, Conspiracy Fact and Theory, Emergency Preparedness | 41 comments

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    This article was written by Tyler Durden and originally published at Zero Hedge.

    Editor’s Comment: It has begun in Europe. They will fall like dominoes.

    A series of bailouts has already begun in response to recent market turbulence over the EU. That heightened anxiety can go along with anger over political conditions and lingering malaise. Britain already cleared its first round of central bank bailouts. Italy is next, and there are several countries who could soon crack.

    It is clear that a larger problem exists here, and that as all things are contagious across the Atlantic, this financial virus is going around. And moreover, there may be a grander design at work.

    Italy Granted “Extraordinary ” €150BN Bank Bailout Program To Prevent “Panic, Run On Deposits”

    by Tyler Durden

    As we noted today, the rumors of an Italian bank bailout, which started on Monday morning, and were promptly shot down by Merkel the next day, got louder after a Reuters report that the Italian government is considering more creative ways to inject liquidity into Italy’s banks. However that was just an appetizer to a main course, which came later today when as the WSJ reported citing a spokeswoman for the European Union’s executive arm that the “European Commission has authorized Italy to use government guarantees to create a precautionary liquidity support program for their banks.”  

    How did this happen so quietly under the table and without Merkel’s blessing? WSJ says that the program was approved under the bloc’s “extraordinary crisis rules for state aid.”

    And here we thought that Italy’s banks are actually doing so very well.  Oh wait, no we didn’t.

    As the WSJ notes, the proposed “crisis” plan is the “other leg of an intervention plan considered by the government” namely, the direct capital injection into Italian banks that would add up to €40 billion in capital to the banking sector”, the one we profiled previously. It is also the plan that Merkel supposedly shut down before it got off the ground. However, Europe had a Plan B up its sleeve.

    What are the details of this latest “crisis” program?

    According to an EU official, the liquidity support program includes up to €150 billion ($166 billion) in government guarantees. The WSJ adds that the commission spokeswoman declined to comment on the amount of guarantees that were authorized, but said that the budget requested by the Italian government had been found to be proportionate. The Italian economy ministry declined to comment.

    An amusing sidebar: “only solvent banks would qualify for the liquidity support program, which has been authorized until the end of the year.” The problem is that with €360 billion in NPLs, every bank in Italy is insolvent, which implicitly means that they will all be found to be solvent or otherwise nobody will benefit.

    Confirming the severity of the Italian fiasco, is that the decision which was taken on Sunday, had not been previously disclosed until the WSJ reported on it and “appears to be a first indication of governments moving to shore up banks in the wake of market turbulence following the Brexit referendum in the U.K.

    In other words, just as we said before, Brexit was nothing more than a Europe-blessed “crisis” ploy designed to achieve two things: unleash more QE, which the BOE admitted will happen (most likely with the involvement of the ECB), and ii) to facilitate the bailout of insolvent Italian banks. To wit:

    Brexit will be just the scapegoat used by Renzi and Italy to circumvent any specific eurozone prohibitions. And if it fails, all Renzi has to do is hint at a referendum of his own. Then watch as Merkel scrambles to allow Italy to do whatever it wants, just to avoid the humiliation of a potential “Italeave.”

    And while Angela Merkel apparently shut down the original proposal pitched by Italy, Europe – surely under the guidance of Mario Draghi – has found a way to circumvent her veto power.

    “As this decision and other precedents demonstrate there are a number of solutions that can be put in place in full compliance with EU rules to address market turbulence,” the spokeswoman said.

    To be sure, Italy’s market has indeed been turbulent: Italian banks have lost more than half of their market capitalization since the beginning of the year, as investors fret about the lenders’ huge exposure to bad loans. That compares to an average decline of less than one third for European lenders. Some Italian banks have seen their shares drop by some 75%.

    But what is most stunning is the WSJ’s conclusion of what the plan is supposed to prevent – it is not to halt the stock price collapse, it is to prevent a bank run:

    A person familiar with the Italian government plans said the cabinet of Prime Minister Matteo Renzi hoped to use a liquidity backstop to contain investor panic, which could result in a run on deposits and affect banks’ liquidity.

    Needless to say, for Italy’s Prime Minister to be contemplating how to avoid “investor panic” and prevent a “run on deposits“, then Italian banks must truly be on the verge of collapse.

    Finally, for those curious about timing and how soon until it all unravels, we quote the European Commission spokesman who said that “there is no expectation that the need to use this scheme should arise.”

    What this statement really means, and whether a preemptive plan to bailout Italy’s insolvent banks will “boost confidence”, we leave up to readers decide.

    This article was written by Tyler Durden and originally published at Zero Hedge.

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      41 Comments

      1. CaptAmeica

        This and every other Bank problem is caused by the Bankers to steal the money of the citizens.
        Control the banks and you control your economy.

        • SHITHEAD (SHI-THEED)

          We all know the banksters would never take advantage of free ‘liquidity’. Every financial blip, no matter how big or small, will be blamed on Brexit.

        • penny4yerthoughts

          well think about if the US just defaulted in puerto rico and the vatican is defaulting through italy and england/the queen just pulled out of the EU, the city ztates are just reorganizing and “reconstructing” think about it

      2. Captain Crunch

        This crash isn’t happening fast enough yet. My retirement plan is the ZPOC so let’s get this show on the road for hells sake!!!!!!

        Anyone else see the cankles on lynch??? Cow cankles on par with the clinton cankles.

        Go ahead lady , bring your baddest. We are worse I promise you

        • anon

          CC

          Yes sir, Lynch has the best set of Triangle Legs I have seen in a long time.

          • Kulafarmer

            Im sick and tired of these lame ass government douchebags,,, of for and by the people my ass

            • Captain Crunch

              Totally agree

              To hell with them all , I couldn’t care less about what they say.

              SLOW RECTAL CANCER DEATH TO THEM ALL

          • TEST

            “The most sacred of the duties of a government [is] to do equal and impartial justice to all citizens.”
            —Thomas Jefferson (1816)

            Fat chance with this corruptocrat at the DOJ, who is just as bad as Holder. And I have no idea what Jefferson would do with Hilary, if he was around. But then, I guess that would have depended on what the meaning of “was” was – at least relative to Hilary’s lead role managing all the “bimbo eruptions.”

      3. Slanesh hearts Nurgle

        IT WAS ALL REAL…IN MY MIND

        • Kulafarmer

          Yea, well maybe you should have listened whem you were told stuff

      4. 2isone

        Wonder if the Vatican can float them a loan?

        • Philippe Desrosiers

          Depend on what the mafia bosses will decide and if they want to enlarge their laundering scheme to all Italian banks outside Vatican accounts…

      5. Mr Smith

        We are being played and bankers never run out of money or computer digits these days and the BREXIT will not be going ahead but the parasites from the left will continue to feats on the fleash of tax payers and the elite will continue to take everyone for suckers.

        What you are seeing is play acting and won’t stop any more cheap slave labour being let in to the country and if you want to make something about it then be ready to get your fighting gloves on because talking won’t fix a darn thing.

        • talon1776

          In your scenario Mr. Smith…there will be war…my money is on the Brits

          • Mr Smith

            if you split the number of people who work in the private sector from all the students, “Can work, Won’t work” plus immigrants and thow in you teachers that are all uber-leftwing or get hounded out of a job then we might be in with a chance.

            The trouble is the police turn a blind eye to what these left-wing usefull tools do and go in boots first against anyone that appears to have a brain.

            Not going to be easy is it.

      6. Observer

        The world economy is smoke and mirrors. The mirror’s broke and the smoke is drifting away. All can see the truth. The horrible bloody truth. Suffering on a scale never seen before.

      7. B from CA

        I hope Italian people are preparing and stocking up on pasta because these bankers control the people through their monopoly on banks.

        Do Italians know why there is a prepper movement in America??? It is because we know the Government and the Tribal Zionists Banksters want to cause financial Armageddon and starve us people of the U.S.A. Into submission. No doubt the Zionist Bankdters in Italy are equally treacherous.

        Buy food and medicine and person care products/soap. But mostly buy flour, sugar, salt, pasta, rice, beans, dried vegtables, canned foods, etc.

        • Joan C

          Anyone who buys silver, and think their gonna survive, should have some hard teeth, to eat it! Anyone want to give them some food for their silver? I’d laugh all the way to the bank, but aren’t any, during the crash! Check out my (not really) website. With the first video, you just gotta laugh..It’s to unreal to believe!! She says the fire marshall and fire chief were texting to each other… before the shooting started! I wrote the whole reporter’s report down. This is the last few sentences she said..believe this one or not!

          “Documents show a full layout of the building, and said that there were 6 exits at the club that night. That 6 exit number is more than what is necessary for the capacity of 299, according to documents. When the fire marshall and fire chief were discussing the possible blocked exits, IN TEXT MESSAGING, WARNING of the Pulse shooting, one of them said to the other, there will be some tough questions to answer…”

          I have the rest(beginning)..ask me for it…

        • Marie

          Stock up on sticky fly paper too. I live in the country and i just caught at least a hundred of flies on the stickys.

      8. AGENT SKINHEAD

        Nationalism is our best defence against the globalists, they hate borders and patriotism.
        I’d gladly eat friggin’ grass for the rest of my days in a free UK so long as it helped in some way to destroy the NWO One World Government Objective.
        Do your bit in helping your country remain nationalistic… USA-Take Back Control.

      9. Frank Thoughts

        The world economy is Plato’s cave. Since the crash in 2008, they created an ersatz economy that was projected as a recovery and restoration of growth. But it was all a mirage created from phony money conjured up by central banks. All the wealth was flushed during the 2008 crash. The quantity of debt owed can never be paid back because the math just does not work.

        The only choice they have now is a re-set and a re-boot. But this will be such a traumatic shock, they know it will lead to wide-scale civil unrest. There is no easy way out at this point. The unrest is certain, what is not certain is how much force will be required to restore order. What level of crazy will the government have to go to to get the reset rammed through and a new currency system introduced?

      10. nubria 123

        When iwas a kid we had well water.raise our food, hogs & chickens. A deer was food not a cartoon.Wore hand me downs had a a smokehouse. And alway knew BLACk Guns matter.

        • B from CA

          Nubria:
          You are ahead of the game. Teach your survival skills. The more people providing for themselves, the less people to deal with if the trucks (of food) stop rolling. The money becomes worthless, or Walmart closes its doors because EBT stops functioning. Any one or all of the aforementioned is possible in the not too distant future.

          I need more Bush’s baked beans. How bout you??

          Oh. I wore hand-me-downs. Nothing wrong with that. Some were very fine. Others, not so much.

        • GruntyMcPhereson

          The more of us that can get back to that lifestyle the better, Nub. I’m a suburbanite in VT, but have leveraged my property toward maximum food production. Garden plots wherever there is space. Fruit trees abound, and raise bees as “livestock” (HOA won’t allow animals, even chickens). Looking for a remote area w/ cabin in the northeastern portion of the state to begin working on a functional BOL as a fallback position. God Bless all here.

        • hammerhead

          nubria, some of us still live that way.
          Around here , its not an uncommon lifestyle.
          Just life in the sticks.

      11. Mr Smith

        A World without money and the corruption it brings, no taxes and free land to build a home on sounds like something worth fighting for and not something to fear.

        I keep some food put by but won’t be running for the hills like a chicken and will play my part by cutting wires that allowes the system to operate CCTV’s all over the place.

        The jewish banking system is being the slave trade in immigrants that are being let in all over the place so my fight is these bankers and the traitors they finance and not your poor immigrant slave worker who’s just trying to take advantage.

        These bankers want race wars but i want their pockets to be filled with silver and to see them thrown into the river to see if they can float.

      12. Sgt. Dale

        Italy was screwed many years ago. They are now just getting to the bottom of the barrel. Simple it finally caught up with them.

        We will feel this very soon.

        Sgt.

        • Them Guys

          Mr.Smith: Have you yet seen that aprox 20 Minit yutube video from a couple months ago on Angela merkel?

          Basically the entire video shows her, merkel In Jeruselem Israel as a key note speaker, speaking to jewish israelies there….And shows merkel profusly thanking them for allowing and inviting her to be able to speak the entire time and every word she spoke in Very Fluent Hebrew!

          She spoke of how proud she was and so happy to again be able to speak in what she called Her Orig Childhood learned language of Hebrew!

          So now there should be zero doubts any longer that most every online info article on merkel declareing her as a Former East German Stasi-Agent since a young Teen ager kid, and that she was Soooo good at being a sorta double agent type Kommie soviet jewdeo bolshevik opperative.

          That even as a youth and teen merkel was one of the tiny Few, Eastern german kommie jewry leadership allowed to have free reign in comming and Going into and back Out of east germany when ALL others had to remain within that “Wall” or get shot on sight like the many prior examples we all were witness to every time one got shot attepting escape from jewdeokommie Hell.

          Angela merkel is Tribe and her very fluent hebrew speaking event proves it in spades.

          I worked for over 25 Years of mostly work involving jewish peoples homes and buisness’s…They were some of usa’s top richest jewish folks that exist…The entire suburbs that surround Detroit city, such as Franklin Mich, Bloomfield Hills mich, Bloomfield City mich, Birmingham Mich and et al etc…Have many of americas wealthiest jewish communities within the usa.

          And even after 25 yrs of Daily working around such folks…I never yet recall seeing any NON jewish folk so very fluent in Hebrew speech!…None period.

          This fact alone to me proves beyond all doubt Angela merkel is a Rothchilds Bankster Puppet to the Inth Degree bar none.

          That and what we have seen her doing since gained top control position in germany and also as one of entire EU’s top officials with far too much power over one billion other folks in eu nations.

          I read that the reason East german Stasi Bosses she answered to back as a teen etc, so allowed merkel free reign to leave and return almost at will while all others Had by Law to remain behind the kommie side of wall.

          Was due to she was considered as one of the stasi’s Star student/agent/opperatives that worked on the agendas of Going around western euro areas trying to “convert” those Free western youth’s into her and stasis mind set of pure Kommie mind think. And she was one of the very Best stasi had!

          Her recent adult life and doings sure makes that sound truthful as can be no? And just was so boastfull proud at a chance to again give a speech in all hebrew language!

          obvious her Mind and Heart resides with jewdeokommies and zio israelies and Not with German folk. She almost makes Hillery look less evil/bad eh?

      13. TEST

        Got gold? (or silver)

      14. Phil

        Do you think it will go down while Obama is in office (so he can maybe stay in office) or will the powers that be keep it afloat for a bit so they can maybe blame it on Trump?

        • La.Maniac

          They are going to try to wait for Trump!
          We need to go back to the time,maybe not if you own land,but,if your on the government dole,you can’t vote.What vote yourself more free shit!! That you and I pay for!!
          Say it again,something stinks,evil this way comes!
          Maniac –out

      15. aljamo

        I must have been poor as a child because I remember in 4th grade the school gave me a package of clothes, apparently because I was wearing the same clothes over and over. I felt embarrassed back then. Two brothers and two sisters and no father.

        • Marie

          I had very few dresses to wear to school. My mom made me where the same dress for three days in a row…and then i wondered why the kids mocked me! This was back in the late 1950’s !!! But my dad had a good blue collar job and i never starved and got two easter baskets every yr. Only child.

      16. Joan C

        I have a website saying there’s a rumor going round, that Obummer is planning on being head of the UN once “Moon”, comes down this fall (his term is up…both of them). Then I have another article, that says he’s going to get that peace treaty signed before he leaves…between Israel and Palestine. That’s a scary one too. Beware of a 7 year peace treaty between the two. That will start the 7 year Tribulation, and you think you’ve seen hell? Just wait! You ain’t seen nothing yet! Let’s hope it don’t happen!

      17. Them Guys

        7 yr treaty you stated of?…Well ONLY if you believe in the likes of Apostate usa preachermen such as john hagee and too many to list here claim. However they make most every such falshood claim based upon their cyrus scofield bible version that was actually a rothschild Bankster family grandson zionist effort at fully corrupting the orig KJV bible.

        A good idea is to Re read a non scofield version, after you first empty your head of 100% of whatever you prior learned thru guys like hagee and many others same as him.

        Total Apostates is a kind of, kind way to say it about them shysters and swindler scammer pastors.

        Also a very good idea is to Research a bit of Talmud which is judaism’s most holy of religious books.

        Be sure you read what talmud says about Christ, Christians, and what they mean when they label Us All as Goyim…if all that fails to open your eyes wide?

        Then go back to hagee et al apostate types I rekon.

      18. Frank Thoughts

        The Brits have fallen for the trap with Brexit. The global collapse will be blamed on the rotten-teethed, veiny-nosed, pot-bellied bigoted Brits. They are the perfect global villain (after Muslims).

        Without Brexit, America would have got the blame.

        • Mr Smith

          But in most cases the americans are to blame because your military is used as a tool by the bankers who own Congress via bribes.

          All these places around the world that they call your freinds are not your freinds when they have a US military occupation force on there soil, they are being held hostage using puppet governments back by the USA and it’s banksters.

          Did you know that people in Poland that protest when the tanks drive through town are being thrown in jail or that people in Japan are having to accept a military being imposed on them because the yanks are all over town.

          FFS: your government is backing ISIS and did 9/11 to itself but thats not being painted into the picture presented to you by CNN news

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