The EBA will demand more capital requirements from German banks to cover their exposure to sovereign debt. Have we finally realized that Germany and France have yielded enough now that it is painfully obvious that the French are hurting for near-term financing and the Germans were responsible for granting excess loans to the periphery?
The obsession with raising capital levels within the scope of the current crisis will only exacerbate problems.
Because how are we going to raise funds with closed off markets? Further, it is not going to clear up any uncertainty about lenders? potential losses, because they already represent a liquidity problem for everyone.
So it is necessary to regain credibility, which is just what the EBA has not been able to do. On top of that, now the Germans are criticizing the institution after meddling in its business.
