Tuesday, July 19, 2011
IMF gets heavy with Europe
Posted by David Smith at 05:00 PM
Category: Thoughts and responses

The IMF has warned Europe it has to act fast to stem the sovereign debt crisis. It says: "Market participants remain unconvinced that a sustainable solution is at hand.

"The euro area’s banking system continues to display weaknesses. Leverage and dependence on wholesale funding remain high. Banks in the periphery are vulnerable from large exposures to their governments and real estate and from high marginal wholesale funding costs.

"Across the region, banks are significantly exposed to sovereign risks, with a weak tail of banks with low profitability and very thin capital levels remaining particularly vulnerable to further shocks." Its series of reports on the euro area are available here.