Save Europe by Saying No to Bank Borrowing: Laurence Kotlikoff
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Dec. 14 (Bloomberg) -- The euro crisis threatening theglobal economy is not about countries going broke. It’s not evenabout saving the euro. It’s about saving the banks, for thesecond time in three years.
The banks need saving not because they bought toxic assetssuch as subprime mortgages or the government debts of Greece,Ireland, Italy, Portugal or Spain, and not because they are toolarge, overrated or under-regulated. They are in trouble becausethey bought risky securities with other people’s money, and theyhave to pay it back. They borrowed to gamble, lost yet anotherfortune and are facing a massive run.