Is the ECB Solvent?  By James Turk

“For all practical purposes, the ECB is insolvent.  Its doors remain open simply because it is using the well-worn accounting trickery of all insolvent banks.”

“A loss of this magnitude would effectively leave the ECB insolvent and in need of recapitalisation. It would then have to either start printing money [The ECB is nothing but a money-printing organization, so in reality, it would need to print more money than it is already printing] to cover the losses or ask eurozone governments to send it more cash (via a capital call to national central banks).”

“The ECB’s actions during the financial crisis have not only weighed heavily on its balance sheet, but also its credibility.” [Its credibility has already been largely lost.  That happened last May when the ECB bent to the will of politicians ‘solving’ the then brewing Greek crisis and forced the ECB to break its own rules and buy Greek sovereign debt.  The ECB has continued down this path to ruin by buying the debt of other over-leveraged sovereigns burdened by their debts.]”

“In parallel with the IMF’s and EU’s multi-billion euro interventions, the ECB has engaged in its own bail-out operation, providing cheap credit to insolvent banks and propping up struggling eurozone governments, despite this being against its own rules. [emphasis added]  The ECB is ultimately underwritten by taxpayers.”