BURSA 05.06.2018

MAKE (translated by Cosmin Ghidovean)
 
mărește imaginea
MAKE (translated by Cosmin Ghidovean)        "It is a good thing that the public doesn't understand the functioning of our banking and monetary system, because otherwise I think there would be a revolution in the streets by dawn".
       HENRY FORD, founder of the American automotive industry


 
     Fed up with subsidizing the commercial banks with their own money, the Swiss, mobilized through the "Sovereign Money" initiative, have proposed the organization of a Referendum which will be held on Sunday, June 10th 2018 - is a historical referendum, revolutionary for the banking industry, of international resonance -, by which the initiators want to amend the Constitution, which would impose to the commercial banks to grant loans only within the limits of the bank's money, forbidding them to issue scrip money and ensuring the monopoly of the Confederation (of the Swiss state) on issuance of money free of debt.
     According to the supporters of the initiative, the money is issued as debt; the money supply increases through receivables, when the commercial banks borrow from the central banks and when the governments, producers or consumers borrow from the commercial banks.
     The banknotes and metallic coins are issued by the government, but only represents 10% of the money in circulation, with the rest being scrip money, issued by the commercial banks.
     The supporters of the initiative consider that the banking system unduly benefits from gains on the loans granted to the state, when the state itself could issue the money it needs, without paying any interest to anybody.
     Carrying their opinion over to the Romanian realities, we note that the commercial banks lend money to the Government, sometimes using money they borrowed themselves from the National Bank.
     When the Government pays back the debts, it pays interest to the banks (which is already stipulated in the Budget). But the budget is collected from the taxpayers, meaning that the commercial banks are collecting money from all the citizens, through interest, even if some of them don't have an account open with any bank whatsoever.
     NOTE 1
     The Romanian banking system includes 35 banks, for a population of 19.6 million people, compared to the Swiss banking system, which has 261 banks, for a population of 8.5 million people.
     In Romania, the foreign capital is present in 30 banks (out of the total of 35, a proportion of 85%), whereas in Switzerland there are only 107 banks with foreign capital (out of the total of 261, a proportion of 40%). See the insert below "The Swiss banking system".
     So in brief: for the service of transferring the money from the National Bank of Romania to the government (two state owned entities), the commercial banks collect money from all the citizens of the country (the money which is collected from them by the Ministry of Finance).
     Of course, technically, the transfer of money between two state owned entities could be done at the simple touch of a button and without any interest, like it used to be done in the communist economy.
     In other words, without any waste of the citizens' money.
     The current law does not allow that. And it doesn't for reasons of political prophylaxis - to prevent the Government from opening the money hose full power and flood the economy irresponsibly with money that doesn't cost it anything.
     Thus, banks collect interest from citizens, to serve as an obstacle to the potential irresponsibility of the government.
     It is a political price, paid to the commercial banks by the citizens.
     NOTE 2
      Since the interest paid on the loans contracted by the Government from the commercial banks has a political connotation, the configuration of the problem, in Romania, is supplemented by the fact that bank capital is overwhelmingly foreign, (over 90%), thus, disregard the intermediary actions, the simplified process sees Romanian citizens as quasi-exclusively paying interest to foreign capital, in order to prevent their own Government from abusing them financially. When looking at it like this, the process becomes a political option worthy of examination.
     Some Swiss are no longer willing to tolerate the systemic enrichment of bankers, to the detriment of the population, through this kind of businesses that make no contribution to society, based exclusively on the privileges that have been granted to banks under the current financial and economic system that is politically consecrated and secured.
     They say that the system generates various significant negative effects, such as inflation (in the case of commercial banks, "the more money, the greater the profits"), in fact a reproduction from within of the crisis system, given that the loans have a procyclical nature.
     Some people say that the interest rate, as the price of loans, is calculated as the sum of the price of money and the price of the risk of lending, affecting all the prices in the economy; whether they are the price of bread, milk, eggs, phone calls, trips, cars, homes or lathes, locomotives and Swatch watches - in most cases, the weight of the banking risk amounts to 40-45%.
     The Swiss haven't invented the topic of this referendum themselves, rather around the subject, for hundreds of years theoretical battles have been wages (and are still being waged), in fact some people claim that this is the reason why American president John F. Kennedy was assassinated (see the article "200 DE ANI DE LUPTĂ / Năzuința la reformarea sistemului bancar, 1824 - 2018 // 200 YEARS OF STRUGGLE - The desire to reform the banking system, 1824 - 2018 http://www.bursa.ro/200-de-ani-de-lupta-nazuinta-la-reformarea-sistemului-bancar-1824-2018-347720&s=banci_asigurari&articol=347720.html).
     On March 5th 2018, the Swiss National Bank (SNB) announced its opposition to the "Sovereign money" initiative (see NOTE 3), a clarification followed, on May 3rd, by a speech of Thomas J. Jordan, the president of the Council of the Swiss National Bank, who claims that the initiative is promoting an experiment which is not necessary, but dangerous.
     NOTE 3
     I hereinafter reproduce the text posted by the Swiss National Bank (https://www.snb.ch/ en/mmr/reference/media_dossier_vollgeld_kurz/source/media_dossier_vollgeld_kurz.en.pdf):
     "Why the Swiss National Bank opposes the "Sovereign Money" initiative / Zurich, 5 March 2018
     The initiative "For a currency protected against the crisis: money issued only by the Swiss National Bank (the Vollgeld initiative) " - the Referendum of June 10 2018
     The SNB is opposing the initiative, as is the Federal Council.
     Here we have the stance of the SNB at a glance:
     - Switzerland's financial system has a proven expertise and a new relevant regulation has made it even safer.
     - There is no fundamental problem that can make a revision necessary. A radical revision of the Swiss financial system is unacceptable and would draw major risks.
     - Today's decentralized system is heavily customer focused, as well as efficient. The competition between banks ensures favorable interest rates and high quality, modern and low cost services.
     - The SNB has the necessary tools to direct the interest rate level and therefore the money supply, thus carrying out its mandate to ensure price stability.
     - The proposed reform would politicize and complicate the implementation of the monetary policy system.
     - Today, the SNN can guide the demand for money and credit through the interest rates. The guiding of the money supply is practiced by major central banks and has proved its usefulness as a strategy. Abandoning the current system of guiding the interest rate in favor of monetary guiding would be a useless and regressive step.
     - The issuing by the central bank of "debt free money", which the initiative wants, could expose the SNB to political ambitions. It could also lead to a concentration of responsibilities with the Central Bank, which could endanger the independence of the monetary policy and the carrying out of the mandate of the SNB.
     - The "debt free" money issued by the central bank would erode the balance sheet of the SNB and would weaken confidence in the Swiss Franc.
     - A sovereign monetary system cannot prevent the credit cycles and asset bubbles. Improving the instruments available to ensure financial stability include capital requirements and the "too big to fail" regulations.
     - A sovereign monetary system cannot fulfill its promise to guarantee the safety of the financing system and to ensure a greater prosperity through the money of the central bank issued directly."
     It is very likely that the Referendum will not be successful, as shown by a poll conducted by GfS Bern, on May 4th, on a sample of 563 citizens (declared error margin is 2.9% and the potential attendance is 40-42%, according to http://www.gfsbern.ch/ de-ch/Detail/vorkampagnen-neu-im-zeichen-des-behoerdenmisstrauens):
     No: ... 49%
     Yes: ... 35%
     Undecided: ... 16%
     Total: ... 100
     In a recent report, GfS Bern writes that "if the decision on the topic of "Sovereign Money" will have already been made on May 20, then the Referendum will certainly fail", because the citizens' options follow the classic tendency of aligning with the officials' opinions.
     On the other hand, the initiators' optimism is being boosted by the fact that the attitude on the matter of the citizens is changing as they go into its details. It is the reason why we are inviting you, dear reader of the BURSA newspaper, to participate in the poll organized by us, on the BURSA website, on the same issue as the Swiss referendum, if it were to hypothetically be applied in Romania:
     Do you accept the initiative "For a currency protected against the crisis: money issued only by the National Bank?"
     Yes% or No%.
     
     Vote on www.bursa.ro 

     
     * Please, read the explanatory articles that are complementary to this one (especially those by Călin Rechea), so that you cast an informed vote.

 
 

 
Readers' comments    [ add a comment ] 
Trimite părerea ta.
Nume (maxim 50 caractere)
E-mail (optional)
Titlu (maxim 50 caractere)
Mesaj
 
REGULAMENTUL MESAJELOR
Acord
Prin trimiterea opiniei ne confirmați că ați citit regulamentul de mai sus și că vă asumați prevederile sale !
Aceeasi sectiune (English Section)
BECAUSE AN AGREEMENT ON THE PRICE COULDN'T BE REACHED,
Calendarul BURSA 2018
Ediții precedente
Newsletter Facebook Twitter YouTube LinkedIn RSS
Jurnal Bursier
20.08.2018
BVB
     * Prime Transaction: "Circa jumătate din rulaj, dat de titlurile Banca Transilvania"
     
     Piața principală a Bursei de Valori București (BVB) a încheiat în teritoriul pozitiv ultima zi de...  click să citești tot articolul
20.08.2018
BURSELE DIN LUME
     Bursele din Europa au scăzut ușor vineri, investitorii având temeri cu privire la situația băncilor din Italia. Sectorul bancar din Italia este în atenție din cauza îngrijorărilor ce privesc...  click să citești tot articolul
17.08.2018
BVB
     * BET-FI, singurul indice care a închis ședința de tranzacționare în teritoriu negativ
     
     Rulajul înregistrat în ședința de tranzacționare de ieri a Bursei de Valori București (BVB) a fost de...  click să citești tot articolul
17.08.2018
BURSELE DIN LUME
     Bursele din Europa au crescut ieri, pe fondul redresării prețurilor metalelor.
     În acest conext, titlurile "BHP Billiton" Plc., cel mai mare grup minier din lume, s-au apreciat cu 1,2%, la...  click să citești tot articolul
13.08.2018
BVB
     * Circa 30% din rulaj dat de acțiunile Fondul Proprietatea
     * Picaj de peste 5% pentru titlurile Alro, după publicarea rezultatelor financiare pentru primul semestru
     
     Piața principală a...  click să citești tot articolul
13.08.2018
BURSELE DIN LUME
     Bursele din Europa au scăzut vineri, pe fondul temerilor legate de eventuala răspândire în afara granițelor a problemelor din Turcia, unde lira a scăzut masiv.  click să citești tot articolul
Cotații Internaționale

Curs Valutar

Curs valabil din data de 17 august 2018
1 Dolar australian...
1 Leva bulgărească...
1 Dolar canadian....
1 Franc elvețian...
1 Coroană cehă...
1 Coroană daneză...
1 Liră egipteană...
1 Euro...
1 Liră sterlină...
100 Forinți maghiari...
100 Yeni japonezi...
1 Leu moldovenesc...
1 Coroană norvegiană...
1 Zlot polonez...
1 Rublă rusească...
1 Coroană suedeză...
1 Liră turcească...
1 Dolar S.U.A...
1 Rand sud-african...
1 Real brazilian...
1 Renminbi chinezesc...
1 Rupie indiană...
100 Woni sud-coreeni...
1 Peso mexican...
1 Dolar neo-zeelandez...
1 Dinar sârbesc...
1 Hryvna ucraineană...
1 Dirham emirate arabe...
1 Kuna croată...
1 Bahtul thailandez...
1 Gram aur...
1 DST...
AUD
BGN
CAD
CHF
CZK
DKK
EGP
EUR
GBP
HUF
JPY
MDL
NOK
PLN
RUB
SEK
TRY
USD
ZAR
BRL
CNY
INR
KRW
MXN
NZD
RSD
UAH
AED
HRK
THB
XAU
XDR
2.9714
2.3811
3.1091
4.1043
0.1810
0.6244
0.2284
4.6569
5.1960
1.4370
3.6974
0.2463
0.4824
1.0804
0.0606
0.4447
0.6623
4.0889
0.2732
1.0468
0.5943
0.0583
0.3632
0.2138
2.6975
0.0395
0.1467
1.1132
0.6274
0.1230
154.7175
5.6740
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
click aici pentru cursurile pieței valutare - istoric
English Section
15.08.2018
      * (Interview with Radu Grațian Ghețea, President - CEO of CEC Bank)
     In banking there are many risks and that is why banks need to be flexible and have as diverse an exposure as possible, which take the market circumstances at the time into account, says Radu Grațian Ghețea, President and CEO of CEC Bank. He told us, in an interview: "We have to adapt to what is happening in the market and we need to do things in such a way that the economic activity and that of the bank both function properly. If we're going with the idea that we want to eliminate every risk, then we'll just stop doing anything. For instance, we have been and we are a bank which heavily funds agriculture, which also means animal husbandry. A few years ago, our exposure to the aviculture sector was rather significant, and when the avian flu came we had to cover some non-performing loans on that segment. Now that the avian flu is done, we are facing the swine flu. What should we do, stop lending?"
     Reporter: Lately, there have been opinions from some experts who are saying that there is a wave of non-performing loans of the ones taken out by the First Home Program. What is your comment on these statements?  click here to read the entire article
08.08.2018
     * (Interview with Laszlo Diosi, OTP Bank CEO)
     Reporter: How would you describe the banking market, at the present time?
     Laszlo Diosi: Even though there are plenty of challenges, there are also many opportunities for the Romanian banking system. The lessons of the financial-economic crisis have resulted in a better regulated framework, stable, transparent and predictable. The guiding line of the policies developed by the authorities that are qualified, but in particular by those with a regulatory and oversight role has been characterized by a balance between profitability and systemic safety.
     But there is no shortage of challenges. We are talking here about challenges which concern the digitalization of the banking system and the national and international legislation. The entire system needs to align with complex and sometimes confused regulations.
     Recorded by Emilia Olescu  click here to read the entire article
31.07.2018
     * (Interview with Dan Paul, the president of the Association of Brokers)
     The management of the Bucharest Stock Exchange (BVB) needs to find out from brokers whether Romania truly needs a derivatives market, says Dan Paul, the president of the Association of Brokers, who was kind enough to grant BURSA an interview.  click here to read the entire article
27.07.2018
THE DĂNCILĂ GOVERNMENT AFTER SIX MONTHS
     Now we know why prime-minister Dăncilă was in a hurry to announce the activity report for the first six months at the helm of the Romanian government: the nice tale of the hike of pensions and salaries wasn't supposed to be overshadowed by the evolution of budget expenses, whose increase has led the deficit of the consolidated general budget to 1.61% of the GDP, from 0.88% after the first five months of the year.  click here to read the entire article
23.07.2018
BECAUSE AN AGREEMENT ON THE PRICE COULDN'T BE REACHED,
     The public offer started by Vimetco and Conef for a stake of at most 53.77% of the shares of Alro Slatina (Alro) has been unsuccessful, as the issuer announced that due to the unfavorable market conditions, the shareholders, company and underwriters couldn't agree on a price for the volume of 383.79 million shares put up for sale.  click here to read the entire article
23.07.2018
ECONOMIC ANALYST AURELIAN DOCHIA PREDICTS:
     * According to Eurostat, Romania has the biggest governmental deficit in the EU
     The hike of some taxes, in the near future, is unavoidable, according to economic analyst Aurelian Dochia.
     His statement comes as, in the first quarter, the government's deficit has seen an increase over the last quarter of 2017, according to data by the European Statistics Office (Eurostat).  click here to read the entire article
13.07.2018
Russia World Cup
     The final tournament of the World Football Cup will end with a gala representation, the duel between Croatia and France. France, the with the most expensive players in the tournament, has met the expectations, Croatia is the biggest surprise the of the competition.  click here to read the entire article
09.07.2018
FOOTBALL AND MONEY
     Cristiano Ronaldo (33 years old) had several hits over the last few days, even though in the final tournament of the World Championship he failed to exceed expectations, as Portugal was eliminated in the round of eight.  click here to read the entire article
05.07.2018
     The world is intensely preparing for a water crisis, the most important resource for human life. The signs, on a continental and global level, that there is a water problem are increasingly clear.  click here to read the entire article
02.07.2018
     The Bursa Construcțiilor magazine, published by the BURSA press group, has taken the first step in the third decade of existence and has awarded, in this year's Gala, no fewer than 20 awards of excellence, to some of the most important associations in the sector, as well as to companies that have stood out through their activity.  click here to read the entire article
27.06.2018
A VOTE FOR AN UNFORGETTABLE SUMMER
     In the plenum joint meeting of the Chamber of Deputies and the Senate, which will be held today starting at 14:00, will be debated and put up for vote the vote of no-confidence against the government submitted by 152 members of the opposition.
     The document which incriminates the failures of the Dăncilă government has been read in the Parliament on Monday, June 25th.  click here to read the entire article
25.06.2018
     Even without the court ruling rendered in first instance by the High Court of Cassation and Justice in the lawsuit of the fictitious hiring at the Child Protection Department of Teleorman the focus on getting all the institutional levers under the - informal, but all the more important - authority of Liviu Dragnea. But, after his conviction on June 21, this trend will speed up. But only through this kind of concentration of power can the president of the Chamber of Deputies hope to change not only the balance of power - which is already favorable to him, even though nothing is final in politics -, but the legislation based on which he has been sentenced, so that he gets exonerated of any legal responsibility. Or, when the powers of the state are concentrated in the hands of one man, democracy, even though it may be only a façade, moves aside to be replaced by autocracy. And in Romania, the temptation of autocracy, hidden under the veil of illiberalism, is more powerful than it has ever been, after the fall of communism. Could this be just an accident owed to the meteoric apparition of Liviu Dragnea?  click here to read the entire article
19.06.2018
     The Romanian Constitution:
     Art. 80 - The role of the president
     (1) The Romanian president represents the Romanian government and is the guarantor of national independence, unity and territorial integrity.
     (2) The Romanian president must watch for the compliance with the Constitution and the good functioning of the public authorities. For that purpose, the president serves as a mediating entity between the powers of the state, as well as between the state and society.  click here to read the entire article
12.06.2018
     The reunion scheduled today between Donald Trump and Kim Jong-un is taking place in Singapore due to the relative neutrality and the security this city-state provides. Singapore is one of the few countries that still hosts a North-Korean embassy, and many of the deals of the Kim regime were conducted here, according to the foreign press.  click here to read the entire article
05.06.2018
     "It is a good thing that the public doesn't understand the functioning of our banking and monetary system, because otherwise I think there would be a revolution in the streets by dawn".
     HENRY FORD, founder of the American automotive industry

     Fed up with subsidizing the commercial banks with their own money, the Swiss, mobilized through the "Sovereign Money" initiative, have proposed the organization of a Referendum which will be held on Sunday, June 10th 2018 - is a historical referendum, revolutionary for the banking industry, of international resonance -, by which the initiators want to amend the Constitution, which would impose to the commercial banks to grant loans only within the limits of the bank's money, forbidding them to issue scrip money and ensuring the monopoly of the Confederation (of the Swiss state) on issuance of money free of debt.  click here to read the entire article
.