ECB Backs Dijsselbloem's Liquidation Policy "Template"

Tyler Durden's picture

It appears the European Central Bank is having trouble keeping its lies straight. When Jeroen Dijsselbloem ("Diesel-BOOM", "D-Boom", or just "Diesel") made his now infamous "template" comment last week, reality was shattered for many trend-following, momentum-monkey, hope-and-dreamers that actual real monetary pain could exist for a bank that was entirely incompetent (and insolvent). Instantly the rest of Europe stepped up to deny-deny-deny (as did D-Boom himself) explaining this was a 'unique' situation with French ECB Director Benoît Coeuré explicitly stating that Cyprus is not a model for future bank rescues.

However, as Reuters reports, it appears fellow-Dutchman and ECB Governing Council member Klaas Knot said last night that there was "little wrong" with J-Boom's comment and that "the content of his remarks comes down to an approach which has been on the table for a longer time in Europe. This approach will be part of the European liquidation policy." Further confirming D-Boom's perspective, Knot added that, "there has to be transparency about losses in the banking sector... and banks have to wind down their loss-making operations."

It seems that in 2012 the ECB split was between the Germans and Draghi on unlimited inflation threats; in 2013 it will be between those who want bail-ins and bail-outs.

Via Reuters,

European Central Bank Governing Council member Klaas Knot said on Friday there was "little wrong" with Eurogroup chair Jeroen Dijsselbloem's recipe for dealing with future euro zone banking crises, a newspaper reported.




Those comments - which Dijsselbloem later rowed back on -prompted a market selloff and led two other ECB policymakers, including executive board member Benoit Coeure, to say on Tuesday that Cyprus was a unique case.


But Knot, who sits on the bank's main decision-making body, said: "There is little wrong with Dijsselbloem's remarks.


"The content of his remarks comes down to an approach which has been on the table for a longer time in Europe. This approach will be part of the European liquidation policy."



In a speech on Thursday night in Amsterdam, Knot said euro zone banks needed to clean up their balance sheets by winding down loss-making operations.

"Firstly, there has to be transparency about losses in the banking sector. Secondly, banks have to wind down their loss-making operations," Knot said.

And now, once more, this time with feeling: Diesel-BOOM.

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kaiserhoff's picture

Of the 50 ways to leave your lover,

how can they always find the worst possible?

bank guy in Brussels's picture

It's the end of the euro as we know it

And I feel fine ...

(with apologies to music band R.E.M., 'End of the World as We Know It':)

McMolotov's picture

What's the frequency, D-Boom?

EDIT: Don't watch that muppet video if you're on peyote. Freaky shit.

The Shootist's picture

Speaking of Denmark, what's going on in th silber 'market'?

RSBriggs's picture

Nothing.  It's closed today.  Prices seem to be moving up and down at random.

Gief Gold Plox's picture

Not random. It may say that the market is closed, but that does not mean no trading is taking place. As a matter of fact I believe Tyler explained this last year or maybe it was two years ago. "Market closed" just means that us mortals don't get to see the whole picture for a while. Shit happens in that time nonetheless. Someone please correct me if I'm wrong.

The Shootist's picture

I refer to yesterday's after hrs cmi trading.

ZerOhead's picture

Deiselboom:  Nicosia Capitalflight 

(Based loosely on the Dutch band Diesel hit Sausalito Summernight )


We left for Nicosia in your Rambler...

The Bank of Cyprus running dry...

I've never been much of a gambler...

And would rather see the bastards fry...



God I feel Old

that had to be 1982 83, I was a sophomore in college when it cost $8 per semester hour.  12 hours could be bought for $350 a semester




Sudden Debt's picture

they should make a new movieclip like this one but about the euro...

there's euro's on the starboard bow, starboard bow..

it's money Jim, but not as we know it, not as we know it...

monopoly's picture

Sudden, what do you see and hear from other Europeans as regards leaving their Euros in a European bank?

Sudden Debt's picture

terrible... most realise the shit is dangerous but... they don't do anything!
It's still to far!
And when I tell them cyprus is europe... they don't seem to care or realize it!

today I was talking to a guy who has a few 100k in his account.
well off.
He says he's kind of worried but won't his money, doesn't really believe in gold ... he says he'll buy some but he's been saysing that for 2 years now.
and he's about 60years old.

I tell him he'll mist likely won't get a pension at 65 because by than the system will be imploded...

it's hard for most people to graps the situation I guess.
The econemy has been perfect for the last 20 years! don't forget that.

it's a mirrage that nobody wants to see to end and that's why they don't want to thik about it.

I am now officially almost broke. I moved it all these last 3 years. It's all hidden. 3 houses sold, and the money is also transfered into PM.
I even took a loan to lower my net value and put it in PM's.

I can wait. got a great job and so does the misses so as long as the economy floats we'll do fine. when the shit breaks down, we'll move out of europe and start over with a little treasure chest :)
We are now applying for a second citizenship in the Antilles and I might buy a small appartment there if there's more time to keep all options on the table.

Most people just don't want to think like this.

AND 87% of them do that in paper!?!?


scatterbrains's picture

Would someone mind explaining to me how in the face of massive global asset seizures and strict bank deposit controls this is bullish for pm's ?  Seems to me the pm's would get absolutely crushed during the time frame.. at least at first.  At some point if they reset the system assuming they anchor it to gold I could see it launch higher to what ever mix they use to tie it  to the new currency.  I would think there might be a chance to buy pm's dirt cheap in those initial panic flights.  I'd sure like a chance to add more gold if the opportunity presents itself.


kaiserhoff's picture

At least at first, yes.  There may be some panic selling of just about everything in the desperation to get liquid, but as SD points out, not that many people in the US or Europe own PMs.  PMs are valuable, transportable, and relatively fungible (easy to buy and sell with low costs).  All that is defensive, the least awful option given what is coming.

There are dozens of opinions here, but I think most would agree that there is a lot more paper than physical in gold, and manipulation in silver.  Once that becomes known, the party starts.

Sudden Debt's picture

I buy silver right now at a 40% discount in france.
i never thought this would happen.

Sure I curse my for buying a shitload on newyear but that's why I constantly buy.

There's a lot of antique silverware on the markets right now that's dirtcheap. auctions are pilling up to the sky right now.

and silver coins like eagles carry a 30% premium. go fish...

Son of Loki's picture

I'll take Lesbos island...if they are sincerely liquidating Europe.....just give me Lesbos and I'll have a Happy Ending.

Buck Johnson's picture

We all are figuring out that they are going after the "rich" for their money (which really means the middle class businesses and corporations because we all know that if you have a few billion you can bribe the bank official to allow you to send whatever money to wherever and if not you can remind him you can pay for him to be killed).  Who's next, Reggie was going to write about who may be next for next week I can't wait and see.  I think it will be Spain.

francis_sawyer's picture

Just drop off the key Lee & git yourself free...

redpill's picture

The last thing I want to do is hurt you.....













....but it's still on the list.

rqb1's picture

Its not you, it's me.

McMolotov's picture

"It's not yours, it's mine."

Spigot's picture

"You didn't deposit that money. It was deposited by other people." - Zero

kliguy38's picture

list? what list? nobody told me bout no damn list..........

disabledvet's picture

This is the tragedy that SHOULD have befallen the United States in 2008...but did not. I've been chewing over possible alternatives to "this" but I can't think of any right now. Obviously I find it hard to believe anyone would be advocating the end of the euro from inside Europe...and I'm unclear if that's what's being done here. If I was using the euro in any capacity I would like to know of course. The same goes if I'm charged with protecting the Continent in some capacity. Is there a cost to a peace which has lasted well over 65 years now? I would like and would like it if many others said no of course.

LawsofPhysics's picture

"This is the tragedy that SHOULD have befallen the United States in 2008...and will end the dollar"  Fixed, FYI, Texas wants their gold back.

McMolotov's picture

Better get in line behind zee Germans. Swiss are getting all uppity about "their" gold, too.

pods's picture

You can only rehypothecate Libya's gold so many times.



JimBowie1958's picture

Better get in line behind zee Germans.

The Germans are fucking pussies; Texas will get its godamned gold back, bet on it.

(if they manage to pass the prerequisit law, of course)

NotApplicable's picture

You call this peace?

I think you'll find the moniker "hostage crisis" is far more fitting.

"Do as I say and no one gets hurt!"

*blam, blam, blam*

"Well, except for him, but he had it coming."

Sudden Debt's picture

well... money can't buy you happiness...

mkhs's picture

But it can keep you distracted.

ParkAveFlasher's picture

When you tell one lie, it leads to another
So you tell two lies to cover each other
Then you tell three lies and, Oh Brother,
You're in trouble up to your ears!

So you tell four lies to try to protect you
Then you tell five lies so folks won't suspect you
Then you tell six lies and you'll collect
A life filled with worries and fears

'Cause you can't remember how many lies you've told
And half the things you say aren't true
And sometime you'll slip up, you'll trip up and then
Whatever will become of you?

So you lie and lie without even trying
And each lie you tell will keep multiplying
'Till the whole wide world will know you're lying
Then you'll be
And you should!
When you lie, you're closing the door
On everything good

Northeaster's picture

"When it becomes serious, you have to lie,"

                                -Jean-Claude Junker


neutrinoman's picture

But seriously, who's going to keep track of all the lies and make them harmonize? Not any easy job for anyone ....

NotApplicable's picture

Steve LIESman, duh.

Though the harmony is waaaaay off key.

JimBowie1958's picture

But seriously, who's going to keep track of all the lies and make them harmonize? Not any easy job for anyone ....

Thats what the politicians are there for....

firstdivision's picture

Got a liquidity problem, call 1-800-PtrNrth and ask for Diesel Boom to get prompt service

Mototard at Large's picture

Oh dear. it is going to be the savers vs the takers for the next while as banks and governments start to run out of new sources of money.  What we are seeing in Cyprus and Spain is unnerving for many people – especially savers as the takers get more bold and desperate.   The government, the Banks and supra-national organizations are creating new policies that say they can take your savings

(heads out to corner store to get more popcorn...)



Conman's picture

What they want to say is , we mean it only when stock market algos like it.

Urban Redneck's picture

The two quotes below might have been accurate - if they included a qualification to the effect "EXCEPT THE ECB"

In a speech on Thursday night in Amsterdam, Knot said euro zone banks <<EXCEPT THE ECB>> needed to clean up their balance sheets by winding down loss-making operations.

"Firstly, there has to be transparency about losses in the banking sector <<EXCEPT BY THE ECB>>. Secondly, banks have to wind down their loss-making operations," Knot said.

ziggy59's picture

ECB= Every Corrupt Bankster

ziggy59's picture

Not sure I like term liquidation...

RSBriggs's picture

People might find out that "liquidation" has a slightly different meaning to any Russian Oligarchs (if any actually got ripped off) in Cyprus.

ekm's picture


And the cluless Lew is going to europe.

How come you americans appoint traeas sec somebody who has absolutely no clue about finance?

ziggy59's picture

We Americans didnt appoint him....CONgress did

ChanceIs's picture

No. No. No.

Lew worked for Citi.  Citi appointed him.  That is the same as saying the NY Fed did it.

ziggy59's picture

Maybe Lew wants to see firsthand the Shit spew from these idiots mouths, you know, on site training...