Andrew Booth29 said:Withdrawing deposits doesn't make a bank insolvent. It makes them illiquid, sure, but not necessarily insolvent. 😁
The causality is actually reversed here—deposits are withdrawn because the banks *are* already insolvent.
So, if that's the case, what exactly is the issue regarding liquidity for banks within the European Union? They have a massive pile of solvent savers behind them. Perhaps the real issue lies in those very savers fleeing the Eurozone for the "liquid" zones of the independent monetary systems in Switzerland, the United Kingdom, or the USA. It is almost as if those countries believe they can guarantee the liquidity and solvency of European Union banks simply by hoarding Euros.
It would be quite enough for the Eurozone to attempt to buy up banks using "liquid" funds—using the Francs, Dollars, and Pounds they currently hold to recapitalize an "independent" monetary system that is, in turn, trying to sell them "cheap" Euros. It's a strange logic, acting as if the Eurozone is a buyer capable of guaranteeing the liquidity of the Pound, the Franc, or the Dollar just because they possess the Euro.
Quite simply, why should banks outside the Eurozone even be permitted to operate within the European Union and the EU at all? If they want to act independently, they ought to conduct business as independent monetary entities in Africa, the USA, or Asia—entirely "independent" of the Euro, the EU, the Eurozone, or any EU guarantees. Besides, if they truly feel the need to enter the Eurozone, the British could always just use Greece as an example; they could bail them out with Pounds and fold them into the UK monetary system, assuming they are actually as "solidary" with the Eurozone and the EU as they claim to be.