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In Euro Zone, Banking Fear Feeds on Itself

Remember the collapse of Lehman Brothers? Europeans certainly do.
As Europe struggles to contain its government debt crisis, the greatest fear is that one of the Continent’s major banks may fail, setting off a financial panic like the one sparked by Lehman’s bankruptcy in September 2008.


European policy makers, determined to avoid such a catastrophe, are prepared to use hundreds of billions of euros of bailout money to prevent any major bank from failing. But questions continue to mount about the ability of Europe’s banks to ride out the crisis, as some are having a harder time securing loans needed for daily operations. American financial institutions, seeking to inoculate themselves from the growing risks, are increasingly wary of making new short-term loans in some cases and are pulling back from doing business with their European counterparts — moves that could exacerbate the funding problems of European banks.


Similar withdrawals, on a much larger scale, forced Lehman into bankruptcy, as banks, hedge funds and others took steps to shield their own interests even though it helped set in motion the broader market crisis.


Turmoil in Europe could quickly spread across the Atlantic because of the intertwined nature of the global financial system. In addition, it could further damage the already struggling economies elsewhere.


“This crisis has the potential to be a lot worse than Lehman Brothers,” said George Soros, the hedge fund investor, citing the lack of an authoritative pan-European body to handle a banking crisis of this severity. “That is why the problem is so serious. You need a crisis to create the political will for Europe to create such an authority, but there is still no understanding as to what the authority will do.”


The growing nervousness was reflected in financial markets Tuesday, with stocks in the United States and Europe falling 1 percent and European bank stocks falling 5 percent or more after steep drops in recent weeks.

Full article here

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ORIGINAL: FirmhandKY


Buy Gold.

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ORIGINAL: tweakabelle

"In Euro Zone, Banking Fear Feeds on Itself"

How neurotic is the investor class? According to the OP, so neurotic that fear and greed and selfishness, the 'values' on which it's based, it promotes and 'thrives' are driving it to the edge of collapse.

A monster consumed by its own greed and neuroses, by itself.

How perfectly apt.

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ORIGINAL: ArizonaBossMan

send in Dear Leader. He is the smartest man/child in the universe. He can do to europe what he's done for the USA! YAY Dear Leader! He can bring jimmy hoffa and his knucklehead VP along too, see the sights!

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Germany's top court handed the country's parliament a greater say over euro zone bailouts on Wednesday, in a closely-watched ruling that could hamper Berlin's ability to act swiftly to counter a debt crisis that has plagued the currency bloc for two years.

The Constitutional Court in the southern city of Karlsruhe rejected, as expected, a series of lawsuits aimed at blocking German participation in emergency loan packages. Chancellor Angela Merkel hailed that decision as validation of her much-criticized euro zone policy.

But the court also said her government must get approval from parliament's budget committee before granting such aid and appeared to rule out more radical solutions floated by Germany's European partners for solving the crisis, such as joint euro zone bonds.

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ORIGINAL: Iamsemisweet

It comes down to how anxious Germany is going to be to bail everyone out.

I wish I had bought gold when it was 600 bucks an ounce. But I didn't. I keep thinking the price is going to crash.

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ORIGINAL: FirstQuaker

But the German public is not really happy with their having to carry the Eurozone load.

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But after being pumped with Gulf State sovereign funds, and now recently the Chinese, the Eurozone is running out of sugar daddies

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ORIGINAL: MyVision

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But after being pumped with Gulf State sovereign funds, and now recently the Chinese, the Eurozone is running out of sugar daddies

when was that?

We have money..the question is..do we want to spend it on others..while the people in our own countries get less money.
There is even talk about kicking countries that break the EU rules..out of the EU....sounds good. ( although to late..lol)

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ORIGINAL: Phoenixpower
Today on the radio they brought some comments from people from greece about their frustration with Angela Merkel...where I thought...well...I think we can share our dislike with that lady at the moment...though for different reasons