spotlight europe 07/2012: At Long Last, the EU Takes on its Banks

Five years have elapsed since the collapse of the banking sector in the US triggered the financial crisis. It has caused a lot of despair observing that the European heads of state and government decided to bring the banks to heel only after the looming implosion of Spain’s banking sector in June 2012. Indeed, it is impossible to overlook the causative and harmful role that the banks played and continue to play in the crisis. The debts of the eurozone banks are three times higher than the sovereign debt of all of the eurozone countries taken together. In 2008 alone, Germany propped up its banks by taking over guarantees worth €480 billion.