50

"Can it happen"? Sure, the laws of the EU are set by the members of the EU, if the members want to change the rules they can. They can re-admit the UK or not. If there is a law against it, the EU can just change the law. With sufficient political will on both sides it is possible. "Will it happen"? After years of causing problems, how likely is it that the ...


26

No. But the UK can apply for membership according to Article 49 of the Treaty on the European Union. This normally takes years. The article text: Any European State which respects the values referred to in Article 2 and is committed to promoting them may apply to become a member of the Union. The European Parliament and national Parliaments shall be ...


15

Inflation When the Federal Reserve uses quantitative easing, it adds more money to banking ledgers and removes investment opportunities. The amount that they can do is limited by the reality of the economy. Too much and they cause inflation. Not enough and there is deflation. While nominally under the control of the Fed, in reality the amount is ...


12

A person has to be convicted of committing a crime before they can be sent to prison. "Wrongdoing" is not enough, even when combined with arrogance, incompetence and consequences for billions of other people. So Fred Goodwin may have lost £24 billion, but that doesn't by itself mean his acts were criminal. In the UK criminal proceedings were brought ...


11

Apart from the discussions in the comments about what constitutes an extreme-left party and what does not, I think this is a very complex question. Extreme left? As usual the right-left separation, which is very popular in the media, is, to say the least, a very unsatisfactory one. It depends on the culture of each country, and depends on time. What was ...


11

The problem with "what if" is that anything goes. If they find unobtanium under the hills of Wales which clearly would yield trillions of euro of profit every year but requires ten trillion euros to invest first which clearly requires an all European effort, you bet everyone would very, very quickly find which half of the toast is buttered. Amend the Lisbon ...


9

There is some debate about whether it's a good rule in the first place but there is a number of reasons why governments don't do this: Because they don't have to. Governments have in their taxpayers a captive audience that always has to pay; limited only by their willingness to pay. So as long as the population is not too upset by the tax burden and the ...


9

Has the Republic of Ireland repaid the £9 billion provided by the UK after the 2009 financial crisis? The word we usually use is "loaned" (provided is quite ambiguous in these circumstances). This is important because Ireland is paying interest over that sum. And the interest is similar to the ones being used in the euro zone. The bailout was made by ...


9

In 2010, much of Greece government's debt was in the hand of private investors, especially French and German banks and there were serious concerns that a default could trigger a contagion that would destabilize the whole euro area. So even before any talk of leaving the euro, simply defaulting on the debt could have serious consequences. It might not have ...


9

Apparently the answer is "no". There's a database with conditions attached to loans, and the 2009 Standby Agreement (SBA) with Romania had plenty of those, including pension (legislation) reform, reform of Romania's central tax collection agency (ANAF); these were present since the original May 2009 agreement. There were also some very specific conditions ...


8

Short answer: government policies that produced *artifically low interest rate loans on capital, and moral hazard. *An interest rate is called "artificial" when the rate reflects a mismatch between the time preferences of borrowers and lenders. The artificial part usually occurs when the state central banks inject credit over and above the savings level ...


7

Banks weren't prosecuted for the financial crisis because there wasn't much they could be prosecuted for that wouldn't result in bigger blow back against the government. The banks were giving mortgages to all sort of people that weren't actually qualified, but the government was pressuring them to issue more mortgages because increased home ownership looks ...


7

Basically the US & UK banks were much bigger than Iceland's... which makes the issue of diffuse responsibility more significant. It's a matter of diffuse responsibility said James Cox, a professor at the Duke University Fuqua School of Business. "These people are pretty darn good at what they say on the phone and what they say in emails, so that ...


6

I can mention three direct devaluation and seizure from my readings and memory where Democratic countries involved. first one: Hungary in 1996, Bokros Package contained direct devaluation of Hungarian Forints, so all savings lost value instantly. I think this method is not unique in history, but sadly I can't mention other. second one: Recently in Hungary, ...


6

Some people seem to think that having a private insurance is good enough and the people is to blame, but reality is not that simple. TL/DR Let's put it this way: if you do not trust your bank to return your money to you... why do you think your insurance firm will be able to do so? To avoid people not trusting the bank the FDIC exists. First, to understand:...


5

I'm presuming, based on your asking this 10 years later, that you must be young. So allow me to give you two down to earth anecdotes from the hey days that preceded it. In 2005 a Californian friend of mine, who was broke and unemployed for all practical intents, was dead set about buying a crack shack for $100k-ish, thinking it was a good deal on the basis ...


5

Using of the word "extreme" is inaccurate, firstly because it implies something unnatural and secondly and more importantly as it subconsciously equates the two "extremes", i.e. left & left-ish movements with fascism/Nazism. Thus, my answer will focus more to why there is not a strong social movement against capitalistic crises in Europe today, which is ...


4

Note: I will try to provide a more Eastern-European perspective on the matter. It happened that the crisis caught me working on financial service software and I have some first-hand experience on how it worked from "inside" tl;dr Because financial institution are much more aware of the risks involved by credits and a regular person expects from them to ...


4

The Greek government has not conducted 'haircuts' like those described by Antonopoulous, and certainly not to the extent he suggests, with deposits worth over €50,000 being charged a 20% fee. The measures closest to those which he describes in the linked video were the seizure of local government funds and commercial bank reserves in order to pay salaries ...


4

Entire books have been written on this subject, both about the specific 2008 crash and about financial panics in general, and one SE answer isn't going to cover the full set of categories of miscreants, or convey enough understanding of their misdeeds. We can highlight a few, though. Firstly you have the creation (or, well, enormous expansion) of the ...


3

Bail is actually more complicated than usually shown on TV. The Wikipedia page shows 9 different kinds (and a 10th "Any combination of the above"). Not all of them are relevant to all jurisdictions, but "One billion dollars bail" could really be several forms (my comments in italics after each one): 2) Unsecured bail. It is still a release without a ...


3

Mostly for two reasons: House borrowers were small fry with no resources, in large part. So blaming them wouldn't be productive, as you can't punish them effectively, either in punitive sense OR in restorative sense (maybe undefaultable financial penalty? not sure that'd work or be legal). Banks however, are big fish who can be financially punished, have ...


3

Germany benefits a lot from Greece being part of the Eurozone because it exports goods worth 5 Billion Euro per year to Greece. A common currency aids the involved businesses a lot. For that reason Germany was quite willing to invest into Greece staying part of the Eurozone in exchange for the Greek government being cooperative in supporting the European ...


3

Your own question contains the answer: "or having a flood in your house". Most people not only neglect to purchase flood insurance (I recall seeing a figure of only 18%) - they ALSO choose to live in flood prone areas (not to be insensitive here, but New Orleans is bloody below sea level!!!) without flood insurance. Part of it is moral hazard (the government ...


3

I found a partial breakdown of the cases, unfortunately it's in the form of an interview with their prosecutor. I'll also quote his premises: "In the beginning, we thought we may find something that was linked to the bank collapse itself; someone trying to take his chances because of the confusion of the crisis. But what came up was that many of the cases ...


2

OK, based on Daily TARP Update for 2/1/2013 from US Treasury: | ($Billions) | Loaned | Repaid | Balance | Writeoff | Income | CashBack | =====================+========+========+=========+==========+========+==========| | Bank bailouts only | 250.46 | 234.00 | 16.46 | 3.15 | 6.65 | 268.16 | | Total TARP paid | 418.11 | 344.43 | 73.68 | ...


2

The FDIC protects "small" depositors, with less than $250,000 in a single bank (formerly $100,000). That is, if the bank fails, these depositors will be made more or less whole. These are the people that are most in need of protection. The "big players" can take care of themselves. But the small ones, people for whom $25,000 would represent a huge loss, ...


2

I found two interesting articles Where did the Greek bailout money go? Only a small fraction of the €240bn (£170bn) total bailout money Greece received in 2010 and 2012 found its way into the government’s coffers to soften the blow of the 2008 financial crash and fund reform programmes. Most of the money went to the banks that lent Greece funds before the ...


2

This is an excellent question and it speaks to the fact our media and our schools teach and speak to this topic as if we did not have the worlds' reserve currency. Also, we have been living in a time period where we are dependent on central bank interventions. The world hangs on every pronouncement of the Federal Reserve. So what? So we have the worlds' ...


2

QE was FED buying medium and long-term bonds. The effect of that was to reduce the interest rates of long-term bonds. The question's premise was that this was done to help banks, but it wasn't. It had the opposite effect. This can use some context. After the financial crises, FED lowered the short-term interest rate (FED primary job is overnight ...


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