- 32 updates
The Chancellor George Osborne has told an event hosted by The Times that the failure of the Spanish bank bailout is "depressing" and "frustrating" as he warned that the banks needed to be recapitalised directly in order to convince the markets:
In a statement released by the European Central Bank, the financial body says the overall outlook for financial stability remains "challenging" in the Euro area.
Some of the key aims made in the statement include:
- Member States should step up their initiatives to strengthen the fiscal and banking components of a robust monetary union.
- There remains a clear need for a continued focus on tackling the root causes of the crisis, and a comprehensive response remains key to decisively ending a spiral of systemic risk augmentation.
- An effective use of the financial backstops is needed to halt the downward spiral of self-fulfilling dynamics in the pernicious interplay between sovereign, banking and macroeconomic forces.
Fitch Ratings has downgraded 18 Spanish banks' Long-term Issuer Default Ratings (IDR) and 15 banks' Viability Ratings (VR).
European markets were in positive territory today despite the lacklustre reaction to the weekend rescue of Spain's ailing banks.
The FTSE 100 Index was up 9.3 points at 5441.7, while the Dax and Cac40 were moderately higher in Frankfurt and Paris as investors remained lukewarm about the latest moves to shore up the eurozone.
The International Monetary Fund Managing Director Christine Lagarde has told CNN that action to save the euro is needed in “more shortly than three months.”
“The construction of the eurozone has taken time,” she said, “and it’s a work in construction at the moment.”
JP Morgan Global Strategist Tom Elliot says the Spanish bailout is a temporary solution that is "useful" but not long-term. Mr Elliot says the bailout has stopped a fully blown "systemic European banking collapse" that limits the risk of contagion.
Mr Elliot says the bailout is like "two drunks propping each other up": it is not sustainable and the collapse of one must be engineered.
Latest ITV News reports
George Osborne brands the Spanish bail-out as 'depressing' as the Government began paying more to borrow money than ever before.
Andreas Dombret, a board member of the Bundesbank, explains in a rare interview Germany's tough stance over euro crisis solutions.