The European Central Bank's (ECB) plan to test the health of the euro zone's largest lenders without the means to plug any holes it uncovers risks foiling what some see as the bloc's final chance to put its financial crisis behind it.
Unlike in the United States, where rapid infusions of capital put its banks quickly back on track, Europe's financial system remains frozen, with lenders in countries such as Greece, Spain and Italy hurt by weak demand and soured loans.
To break the "doom loop" between indebted European countries and their banks and reassure investors that stressed euro zone lenders would be dealt with on a regional level, a banking union, with the ECB as supervisor, is viewed as crucial.
Europe's plan to address weak banks risks unraveling | Reuters
Unlike in the United States, where rapid infusions of capital put its banks quickly back on track, Europe's financial system remains frozen, with lenders in countries such as Greece, Spain and Italy hurt by weak demand and soured loans.
To break the "doom loop" between indebted European countries and their banks and reassure investors that stressed euro zone lenders would be dealt with on a regional level, a banking union, with the ECB as supervisor, is viewed as crucial.
Europe's plan to address weak banks risks unraveling | Reuters
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