The ECB buys debt from Club Med government and delivers the gains to Germany, the largest ECB owner. So German banks become the bankers of Europe. Club Med banking networks shrink. It is a regional variation of the distorted central bank concept. Regional S/L in Italy ends up paying fees back to German bank as Italian banks use taxed collateral. Germany is the insurance agency for club med banks, and rates are rising.
But banks dying in cub med is also economies not paying taxes, doom loop.
How do we get the ECB out of the club med insurance business? Let Germany have the business. Germany and club med work this out without the ECB involved. The ECB negotiates an exit from national central banks. members. Instead the ECB becomes a non profit bankers consortium. Due process contract are defined in the deal, thus any EU account holder denied fair priced entry can sue. The New ECB free to compete with the New Fed. the German led sovereign debt resolution group is assigned limited double spending rate.
The debt resolution group is free to use their double spending to enhance S/L by (1+e/2)/(1-e/2). So liquidity of all government increase by some 2% a year. Five year contract renewal because of the state volatility over there.
The idea is the same. Banks were not directly implicit in the losses and buys its way out of the previous contract.
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