Europe Faces Repeat of Credit Crunch, Liikanen Tells Kauppalehti
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Europe risks descending into a new credit crunch as it lacks the tools to stamp out the spread of the debt crisis, European Central Bank council member Erkki Liikanen told Finnish business newspaper Kauppalehti.
“If the sovereign debt crisis isn’t contained, a negative spiral may start again through banks,” Liikanen said in an interview with the Helsinki-based newspaper conducted yesterday and published today. “Great financial crises traditionally go through this phase.”