Barroso's Reveals "Deus Ex Recapitalization" - Complete Talking Point Dud

The market was looking forward to Barroso's disclosure of more details of just what the Euro bank recap plan would look like. The answer: a complete dud.

  • Barroso says fully coordinated approach to European bank recapitalisation should be based on reassessment by supervisors of capital needs
  • Barroso says supervisors should use temporarily significant higher capital ratio of highest quality capital
  • Barroso says if government support is not available recapitalisation should be funded by a loan from the EFSF
  • Barroso says banks should first use private sources of capital, then government support if necessary
  • Barroso says sixth tranche of aid for Greece must be disbursed
  • Barroso says pending recapitalisation, these banks should be prevented from paying out dividends or bonuses
  • Barroso says the EU should agree on second financing package for Greece with adequate public and private financing
  • Barroso says launch of European stability mechanism must be accelerated to mid-2012 and mid-2013
  • Barroso says calls for integrated governance system combining ESM and EU budget rules

This is all great, the problem is these are regurgitated talking points, pardon talking promises if not talking rumors. There is nothing new here about what the deus ex recapitalizacia will look like. Perhaps it is because there is no deus ex, and it is all just more smoke and mirrors as we have claimed from day one?