- Crisis has reached systemic dimension
- Sees upwardly rising risk of contagion
- Over past month sovereign stress moved to larger EU countries
- Signs of stress evident in many European govt bond markets
- Situation aggravated by drying up of bank funding markets
- Measures agreed July 21 must be implemented fully, rapidly
- Credible, sustainable fiscal policies needed
- National govts, EU, authorities must act together swiftly
- Delays only aggravate situation
- Coordination of communication must be enhanced
- Supervisors must coordinate bank capital efforts
- Must consistently evaluate sovereign exposures
- Could be of benefit that EFSF lend to govts to recapitalise banks
- Forex currency lending can add to excessive credit growth
- Suggests authorities see if forex trading adds to excessive gorwth
Yada, yada, yada……… That’s enough of that.
Suffice it to say Trichets’ sombre tone has reversed the fledgling EUR/USD rally and we’re back down at 1.3635.
