According to the New York Times, officials are saying that short-term pain is necessary to put the European economy back on track. Regulators in the United States forced a similar catharsis on American banks in 2009, helping set the stage for the current recovery.
1. What was the result of the timid approach taken by the eurozone to a failing economy? Why was this like Japan?
2. Who is Europe’s new banking overseer and what are some of the tough measures she intends to utilize?
3. The main goals of the new reviews are to expose so-called zombie banks. What are these?
4. What are the stress tests that the article mentions?
5. Briefly summarize the Cyprus crisis.
Ewing, J. and Thomas, L. (2014) Regulators Are Gauging Europe’s Banks, and Remedy May Sting a Little. The New York Times, Oct. 17 (Retrievable online at http://dealbook.nytimes.com/2014/10/17/to-restore-confidence-in-economy-a-test-of-europes-banks/)