Worse than Italy “sleepwalking into instability” is the European Commission pushing the Eurozone into it fully awake.

Sir, Jim Brunsden and Miles Johnson writes the European Commission stepped up action on Italy’s rule-busting 2019 budget, warning that its plans to stimulate the economy through increased borrowing, risks “sleepwalking into instability”. “Brussels warns Italy’s budget threatens ‘instability’” November 22.

Of course, as Pierre Moscovici, EU economy commissioner, says: “this budget carries risks for Italy’s economy, for its companies, for its savers and its taxpayers”.

The sad fact though is that reaching an acceptable agreement on the budget issue would still be like papering over Italy’s and EU’s real underlying problems, not solving much.

The European Commission must/should know: 

1. About the challenges the Euro imposed on Eurozone members and that it has, for soon twenty years now, done nothing to resolve. 

2. That, for purposes of bank capital requirements, assigning a 0% risk to all sovereign borrowers within the Eurozone, those who de facto have their debt not denominated in a domestic (printable) currency, is a regulatory subsidy that impedes markets to signal the real costs of sovereign debt; which will necessarily cause many of its members to incur in dangerous excessive levels of public debt.

Before EC face up to these issues and does something real and sustainable about it, though much mightier, it has still not earned much right to lecture Italy.

Just like all regulators and central bankers, believing that what bankers perceive as risky is more dangerous to our bank systems than what bankers perceive as safe, have no right to lecture us on risk management.

EU can’t keep forcing its members to walk the plank, as it did with Greece, and still remain a viable union. Anyone against a Brexit and for a Remain should be very aware of that… that is unless his position has nothing to do with EU and all to do with local politicking.

@PerKurowski

Should a sanctioned bank like Wells Fargo be allowed to immediately advertise itself as a do-gooder?

Sir, with respect to the recently sanctioned Wells Fargo we can observe that, in order to clean its name, it has now launched, as is typical in similar circumstances, advertising campaigns highlighting its social responsibilities. Should it really be allowed to do so?

Even though Wells Fargo should of course try to do its utmost to compensate their recent bad behavior, I believe it should not be able to advertise itself out of a bad image, for at least two years. A prohibition of that sort would also serve as a great deterrent to others.

And, while being on the subject of modernizing sentences, as a Venezuelan I ask, could the sanctions of those that commit crimes against humanity but have not yet been captured include blocking their presence in social media forever, and perhaps also that of all their immediate families for at least some years?

Of course those criminals could use false names, but who would like to take a (face-recognizable) selfie doing so?

@PerKurowski

Current bank fines paid in cash is judicial masochism. Fines should instead be paid in voting shares.

Sir, I very much agree with Daniel Zuberbühler’s in that a much more constructive way of sanctioning the banks for misdeeds would be to increase their capital requirements, “In banking capital punishment works better than torture”, July 3. Clearly to punish banks with bribes that go against their capital, precisely when we most need them to be better capitalized so as take on their lending functions, amounts to something like judiciary masochism.

But if populist prosecutors insist on taking that route then I have also proposed sometime ago that the fines should paid by having the perpetrator issue voting shares… which the government needs to unload in the market within a specified period. That would indeed be a better way to punish what needs to be punished, without punishing ourselves.