"The biggest news out today were the late day rumors of some sort of Euro lending facility similar to what the US government enacted in 2008 during the financial crisis. These programs helped shore up the banking system and provided the banks with loans needed to avoid mass insolvencies. It now looks like Europe is leaning in the same direction. Unfortunately, it looks to me like they’re making a mistake that is quite similar to the one that the USA made when they diagnosed the problem as a banking crisis.
A Euro TALF will help to ease the strains in the Eurozone banking system, but it will not come close to resolving the root cause of the Eurozone’s problems. This is just another instance of bankers ensuring that other bankers don’t have to take haircuts. Meanwhile, Rome will literally continue to burn. The turmoil in the banking system is a symptom of the sovereign problem. What Europe really needs is a resolution to the flaws of the single currency system...."
at http://pragcap.com/euro-talf-rumors
A Euro TALF will help to ease the strains in the Eurozone banking system, but it will not come close to resolving the root cause of the Eurozone’s problems. This is just another instance of bankers ensuring that other bankers don’t have to take haircuts. Meanwhile, Rome will literally continue to burn. The turmoil in the banking system is a symptom of the sovereign problem. What Europe really needs is a resolution to the flaws of the single currency system...."
at http://pragcap.com/euro-talf-rumors
