Absolutely Not!

From Businessweek:

ECB Will `Absolutely Not' Give Capital to Banks, Paramo Says

European Central Bank Executive Board Member Jose Manuel Gonzalez-Paramo said the central bank will ‘absolutely not” provide banks with capital should stress tests show they need it.

“That is not part of the ECB’s functions,” Gonzalez- Paramo told reporters in Malaga, Spain, today. “It’s up to the governments and national supervisors.”

European Union leaders yesterday decided to publish the results of stress tests on the region’s lenders after Spanish bank officials unexpectedly pledged to make public results on individual banks.

While the ECB “will collaborate in the coordination” of the publication of the results, it is ultimately “the responsibility of the national supervisors,” Gonzalez-Paramo said.

The studies will be done “institution by institution,” French President Nicolas Sarkozy told reporters at an EU summit in Brussels yesterday. German Chancellor Angela Merkel said it was important to give “maximum transparency.” Asked how the governments would react if the tests revealed shortcomings, she said the EU has “taken precautions,” including a 750 billion- euro ($928 billion) financial backstop.


Absolutely is strong language for a Central Bank.

Will European banks requiring capital trigger the second Lehman event we have been concerned about?

Is this why the ultra wealthy are shifting their assets into physical gold even as it hits new highs?