New York Times
September 21, 2011
The European Central Bank took further steps Wednesday to ease a cash crunch at the Continent’s banks, as the International Monetary Fund warned that the sovereign debt crisis would require a huge increase in bank reserves.
As leaders in Greece and Germany continued to debate how to escape the sovereign debt crisis, the I.M.F. estimated bank risk stemming from the crisis at roughly €300 billion, or $412 billion. Political infighting is partly to blame, the I.M.F. said in its Global Financial Stability Report.
“Political differences within economies undergoing adjustment and among economies providing support have impeded achievement of a lasting solution,” the I.M.F. said.
As if to illustrate the point, the Greek government tried Wednesday to sell its lawmakers on adopting additional austerity measures being demanded by international lenders. Without more aid, Greece could go bankrupt within weeks if not days.
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