How long left for the traditional banking system?
The European Central Bank (ECB) has sent out its most stark warning to commercial banks thus far, using phrases such as “never seen before” and “unprecedented shocks” – and concerning views that the risks are “high as never before”.
The message is certainly clear: Be prepared for the unexpected – cyber attacks, trade disputes, geopolitical instability, climate-related crises, ageing populations and the rapid disruption of new technologies have all been cited.
Banks to reverse engineer scenarios
To that end, the ECB is advising banks to reverse-engineer scenarios where they run out of reserves/equity. Bank managers will have to game-theory the steps they’d take. The main aim of this will be to get managers actually thinking creatively about the dangers of modern banking in a volatile world – to think better how to deal with known, knowns, known unknowns and maybe most importantly to root out and consider unknown, unknowns.
No detailed threat has been briefed. The central bank admits itself that it does not know where the potential threat would come from or when it would happen, but it is obviously worried enough to instigate this action, which will no doubt have a substantial cost attached to it. The ECB says banks included in the scheme should be prepared to “bulk up their liquidity reserves, modernise outdated systems and prepare for more intrusive supervision.”
Cutting through the jargon
One doesn’t have to be an award-winning economist to know exactly what is coming down the pipe. Bulking liquidity reserves refers to the money printing that is about to happen. The debt Ponzi scheme that is the traditional banking system cannot survive without it, so EU citizens can look forward to another round of inflation, which will see many fall off the back of the economic treadmill.
Modernising outdated systems is the aim. The ECB is making no attempt to hide its plans to move to the digital euro – a plan which maybe completely un-noticeable to most who barely use cash now. But their money will be a programmed Central Bank Digital Currency (of which I have written frequently about), which will afford the ECB total programmable control over currency
The rather sinister-sounding “prepare for more intrusive supervision” suggests the ECB will be looking to further centralise power and control. One need only look over to the United States to see what has happened to many of their commercial banks over the last two years. Many have had to close due to a combination of government capital controls and pressure from larger financial institutions. This serves to monopolise the game for the “too big to fail”, who swoop in at the point of liquidation and buy these otherwise functioning banks for pennies on the dollar.
The end game
Central Banking is the devil we know. The stated aims most of them profess to partake in – including fiscal stability, stable currency, keeping inflation low and managing interest rates – are a shroud for their real world effect: the slow, insidious transfer of wealth and sovereignty from everyday folks to the rich power-hungry few.
