ECB official: EU banks “very close to having a collapse” last autumn

It has been clear for a while that this banking crisis was not going away any time soon. We now know for certain that the European banks were in bad condition last autumn and this week, we’re seeing the downgrade of 16 banks in Spain including the global behemoth Santander. There remains plenty of uncertainty due to the ongoing issues in Greece, Spain and the Eurozone in general.

We’re four years on from the crash, so when will the banking crisis end? So far it’s been mostly about pain for the general population and too little change for the banks. More on the crisis from The Guardian:

A senior executive at the European Central Bank has admitted eurozone banks were on the brink of collapse last autumn.

In an interview with the BBC to be broadcast on Thursday, Benoît Coeuré, executive director of the ECB, said: “In the autumn of 2011 the conditions were very dangerous … European banks were facing severe difficulties to fund themselves, to access finance, and we were very close to having a collapse in the banking system in the euro area, which would have also led to a collapse in the economy and to deflation. And this is something that the ECB could not accept.”

The concern about the state of the banking system led to €1tn being lent to banks through three-year loans and came as UK banks were told to make preparations for a potential exit of countries from the single currency.

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

Share This Post

© 2021 AMERICAblog Media, LLC. All rights reserved. · Entries RSS