European Banks Facing Severe Debt Crisis

by khalid on 10/10/2011 · 1 comment

It seems that European Banks may need more than 100 billion Euros to be able to recover from the debt crisis doing the rounds. There was a meeting in Ireland between the French president Nicolas Sarkozy and German chancellor Angela Merkel to look out for a solution on how to recapitalize on the lenders. The European banks are facing severe debt crisis and holdings of government debt from Greece and other Euro Zone periphery states has provoked the explosion and urgency to bring out a solution and an end to it.

The German Finance Minister Wolfgang Schedule told that this is a huge crisis and there is a high risk that this crisis could escalate. Germany and France are split on this issue and have got some different ideas, almost all of them want to fight the shaky lenders and weak financial condition. Paris is keen to tap the Euro Zone’s 400 billion rescue fund, the EFSF, to recapitalise its own banks. Berlin is also insisting that the fund should be used as a last resort. The International Monetary Fund has said that the European banks need around 200 billion Euros in additional funds. The capital which is required to boost the European Banks will be coming from various sources and the total bill will be very large. There is a general agreement that the requirement is large and the European banks need help to recover from the debt crisis. The regulators are worrying that the forcing of the raft of major lenders to take the stake will be the best use of Europe’s limited capital resources.

 Bell The Bull says : European Banks Need Lenders To Meet The Severe Debt Crisis

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