Tuesday, July 12, 2016

European banking system ready to implode unless the ECB comes up with $150 billion or more in bailouts

Over the weekend, Europe’s most toxic and insolvent bank (Deutsche Bank) came out with an announcement that if the European Central Bank (ECB) didn’t come up with $150 billion or more in new funding to bailout the continent’s banking system, then it could potentially face an ‘accident’ similar to 2008’s ‘Lehman moment’.
And it is not the largest German bank that is the sole institution in need of recapitalization by the ECB.  In Italy, nearly all the major banks are on the cusp of insolvency, and appear now in the process of a government sponsored bailout coupled with a small customer bail-in.  Added to this, British banks are running into major problems over their bursting housing bubble, and while the UK no longer has the security of going to the ECB for emergency lending, they may receive it anyway since other EU banks hold long derivative positions on the island nation’s securities and could implode if Britain goes the way of default.


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