ZeroHedge/Tyler Durden/7-10-2016
“In Europe, the bailout does not need to be so large. A €150 billion program should be enough to help European banks recapitalize,” said David Folkerts-Landau. He adds that the decline in bank stocks is only the symptom of a much larger problem, namely a fatal combination of low growth, high debt and a “dangerous” deflation. “Europe is seriously ill and needs to address very quickly the existing problems, or face an accident,” said the chief economist.
MK note: Like most bailouts, the initial requests are likely to balloon once the first commitments are made. In Italy alone non-performing loans amount to €360 billion. As of November, 2015, the European Banking Authority reports total bad debts of about €1 trillion, so it is difficult to fathom how €150 billion figure would be anything more than a stopgap.
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