How American Taxpayers Could End Up Paying for ECB Liquidity Flood

Posted by Kendall Harmon

It sounds like a good plan, but here’s the real risk: even after this restructuring, Greece ends up defaulting on those new EFSF-backed bonds. Remember, this is a solvency problem not a liquidity issue.

So the EFSF takes a loss, and maybe even its partner, the IMF. The debt is removed from bank balance sheets and put directly on the taxpayers of Europe and, via Washington’s 17% stake in IMF loans, Americans.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankTaxesThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--The U.S. GovernmentFederal Reserve

0 Comments Posted September 15, 2011 at 3:15 pm

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