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The Increasing Fragility of European Banks

6/1/12

Senior Fellow Liliana Rojas-Suarez discusses the recent increased weakness of European banks. She argues that the crisis will exacerbate unless the European Central Bank (ECB) fully exercises its role as lender of last resort in the near future. Timid injections of liquidity will not do the job. In her view, however, Germany's political apparatus is not ready to support the ECB crucial role. At his point, the most likely scenario is a breakdown of the Eurozone and full-blown banking crises in a number of countries in the area.

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