Tuesday, October 4, 2011

No money to lend you – Sorry!

EU preparing bank rescues amid Greece doubts

"European finance ministers agreed on Tuesday to prepare action to safeguard their banks as doubts grew about whether a planned second bailout package for debt-laden Greece would go ahead". "More and more European banks are being shut out of the market and relying on the European Central Bank for liquidity". "All roads now point to a mid-November crunch". For Greece, the deeper-than-forecast recession means public debt will be equivalent to 161.8 percent of GDP this year, rising to 172.7 percent next year, by far the highest ratio in Europe.

Posted by alan @ 09:24 PM (2403 views)
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3 thoughts on “No money to lend you – Sorry!

  • Trichet goes on November 1. The new man coming in is an Italian, Mario Draghi. Trichet in this article said when “asked whether the ECB should act as Europe’s lender of last resort, as the U.S. Fed and the Bank of England do in their countries, he pointed to its action in providing unlimited liquidity but said he did not favour bailout funds being refinanced by the central bank”. One wonders if Draghi will have so many qualms.

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  • Meant to add, the blog on the Economonitor website, see above, suggests this might be possible.

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  • general congreve says:

    Apparently the finance ministers have agreed recapitalisation of banks will be best, that way they can hand taxpayer loot straight to the banks to stop them going bust on their bad debst and cut out the Greek (etc.) middle man who keeps failing reign in his spending. Then Greece (and friends) can default all they like, but still won’t need to be kicked out of the Euro for doing so.

    It’s a massive win for the EU politicos, the bankers, Hewlett Packard and people working in the ink and paper industries.

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