eurozone zombie banks


Bank deposits with the ECB now stand at their highest level since June 2010 at €905bn (£772bn) as lenders withdraw deposits held with their peers and put them into the central bank. At the same time, banks in major eurozone countries such as France and Italy have become increasingly reliant on central bank funding. This follows the trend seen in smaller countries like Ireland where lenders have effectively becomes taxpayer-funded "zombie" banks.
The European banking sector's problems are being exacerbated by a wave of asset sales as lenders look to dramatically shrink their balance sheets. UBS estimates eurozone banks could sell off between €3.7 trillion and €4.5 trillion of assets in the next three years.
The financial resources to bail out Europe must primarily come from within the continent, the official said, adding that the IMF cannot substitute for a European show of force.
President Barack Obama has stressed that Europe has the means to resolve its crisis.
Europe simply needs to muster the political will, Obama said December 8,
As part of the summit, European Union members agreed to raise as much as 200 billion euros, or $267 billion, for loans the International Monetary Fund could offer to debt-wracked nations on the continent. But European officials failed to increase the 500 billion euro, or $689 billion, cap on their own bailout lending funds.