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:
What is depressing ... is that everyone said to the eurozone that if you do not directly recapitalise these banks, if you do it via the Spanish sovereign, then you are not going to convince the market the Spanish sovereign is entirely credible... and yet they went ahead down this route.
The frustrating thing about all of this ...if we are always in our reaction to every problem is ‘too little too late, not quite enough,’ then we are going to have a long period of uncertainty and fragility within the eurozone.
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.
In a statement from the European Central Bank regarding the eurozone crisis, the bank states there needs to be ''concerted and comprehensive action" to halt the "downward spiral" with "pernicious interplay".
Shares have been suspended in three Italian banks after their share prices drop more than 5 percent.
The euro crisis is making it difficult and expensive for Spanish banks to get hold of credit, deduces Fitch.
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.