‘Europe’s other debt crisis’

Europes other debt crisis

In addition to Europe’s sovereign-debt crisis is another looming problem: a private-debt crisis, built up by banks and private companies who took out huge loans, which they are unable to repay, writes The Economist.

Now, the European Central Bank is seeking to tackle the issue. Through its Asset-Quality Review, it will analyse the financial security of the region’s 128 biggest banks and make recommendations for recapitalisation for some and closure for others.

Noting that the Eurozone problem “has morphed from an acute crisis into a chronic one”, the weekly adds –

Sorting all this out will take time. Dealing with the private-debt trap should be a priority for Europe’s leaders. Better capitalised banks would be more able to lend; they would also make it easier to create a banking union.

Read the post at Presseurop here.

Read the original article here.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

1 Comment on "‘Europe’s other debt crisis’"

  1. Well, it seems that big European banks are going to be able to borrow
    ‘any amount’ of money in three separate auctions in October, November
    and December. Banks will have to put up collateral, or security, to tap
    the emergency funds.

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