Is Christine Lagarde, the new head of hte IMF, proving a little less French than I had feared?At the Jackson Hole comference of central bankers she shocked everyone by saying that Europe should attend to the recapitalisation of its banks. This was strongly denied by Brussels, which is another reason we should take it seriously.
Despite two attempts, European banks have still not endured an adequate stress test; in particular their holdings of suspect foreign sovereign debt have not been properly scrutinised.
Lagarde is at least half right. Europe should worry about its banks, but stop bailing out its sovereign members.
No comments:
Post a Comment