A different take on the European Bank Crisis

by Laura Ehrenberg-Chesler on December 16, 2010

in Banks,Credit Crisis,currencies,Foreign Markets

Much of what we read in the press lends itself to the opinion that Germany’s banking system, as well as its economy, do not have much in common with countries like Greece, Ireland, Portugal or Spain.

In reading today’s research from Ed Yardeni, it is apparent that Germany may have a lot more in common than is widely believed.

Yardeni writes, “German banks share some serious issues with Ireland’s banks.  Germany’s adopted currency, the euro, may have more similarities with the bad old Greek drachma than the good old deutsch mark….German, French and British banks went mad lending hundreds of billions of euros to banks in Greece, Ireland, Portugal and Spain.”

It is easy to see how these countries really have many of the same difficult core issues.  George Soros recently suggested in the FT, that the European bailout fund be used to recapitalize the banks across Europe, rather than each country trying to act on its own.  Given the interrelationship of the European countries, this seems to be a much better solution.

Leave a Comment

Previous post:

Next post: