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Sunday, September 2

2nd Sep - Weekender: Europe, Asia

A lot on the banking union for Europe in this post. I believe it is perhaps even more important than ECB's response, as the ECB's response without a workable banking union will not help in the long run. So it's either a union or a break-up.

Previously on MoreLiver’s:
31.8. Best of August most read pieces + all my ’views’
31.8. EU Open
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Credit Suisse: Analysing the ECB scenariosZH
Our central scenario is the Compromise Scenario where the ECB cuts the Repo Rate to 50bp, keeps the Deposit Rate at 0% and revises the collateral framework. We expect little new material information on the front end SMP bond buying program. To us, this will underwhelm market expectations and will lead to a modest rally in core markets.

Federalism or Bust for Europe?Project Syndicate
Whatever route it takes, Europe in the coming years will have to address the weak representation of the common interest – or else admit that no such common interest can justify remaining on the path of integration.

[Opinion] A fig leaf of continental proportionseuobserver
Efforts to solve the eurozone crisis EU leaders are missing the wood for the trees. Instead real emphasis must be put in constructing the foundations of a new political union, writes Petros Fassoulas

Spain's banks sell government debt to finance deposit outflowsZH

France Nationalizes Its Second Largest Mortgage LenderZH
The French government suddenly announced the nationalization of troubled mortgage lender Credit Immobilier de France, which is also the country's second lagrest mortgage specialist after an attempt to find a buyer for the company failed.

Bankia Gets 'Pre-Bailout' Bailout "Immediately" As Bad Loans Jump 44% - ZH
Bankia, el banco maloalphaville / FT

Sep 12th Elections in the Netherlands: Voter Intention SurveysPlace du Luxembourg

Finland: IMF Executive Board Concludes 2012 Article IV ConsultationIMF
European risks, aging mentioned, structural reforms suggested. (full pdf)

The optimal size of the European Stability Mechanism: A cost-benefit analysisCB of Netherlands (pdf)

The use of the Eurosystem's monetary policy instruments and operational framework since 2009ECB (pdf)

In the Picture: European banking unionThe World / FT
very good rounup summarizing (and linking) tons of material

Banking union to put 6,000 banks under ECB supervisioneuobserver
The ECB will have the "ultimate decision-making authority" on supervising 6,000 euro-area banks, a commission spokesman has said. But Germany would like less banks included in the new system.

Governance of bank supervision is central to its successbruegel
The Commission should carefully consider whether a different governance of banking supervision in the euro area might be warranted. A small, yet heterogeneous committee, able to take swift decisions based on a wide variety of views, appears central to effective bank supervision.

Brussels Pushes for Another "All Powerful" Banking Committee, Headed by ECB, In Spite of Objections by ECB and GermanyMish’s
To become law, all 27 nations must agree. Barroso hopes for a summit before the end of the year. In addition to unanimous approval for such a position, I would point out that ceding power to Brussels is a change so sweeping that Germany would require a national referendum, just as with the eurobonds idea.

Everything You Think You Know About China Is WrongForeign Policy

Charting China's 'Monetary Policy' ImpotenceZH

China official manufacturing PMI points to contraction in August ASA

China’s labour market seems robust (or perhaps not)ASA
China’s Growing Economic Crisis Columns / BB

China's companies are unprepared for the nation's economic slowdownSober Look

Best Way to Invest in China? Invest Somewhere ElseInstitutional Investor

BOJ is helpless in the face of Japan's structural issuesSober Look
It's becoming clear that at this stage (similar to the case in the US), the central bank can do little to improve growth in any material way. Raising bank excess reserves further via QE is simply not going to solve the structural issues faced by Japan. 

Defusing Japan's Pension Time Bomb?Pension Pulse
Nice long article with links. Good for reading later, too.

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