Bank Restructuring now?

Bank Restructuring now?
The possibility of bank restructuring may have to wait until the current euro crisis has been managed.
This is because the banks have been told by the government to increase their reserves in case of a euro crisis. At the same time the banks are being urged to lend more to their customers. These may well be two conflicting requirements.
Further, banks are becoming more risk averse to lending. This is partly to meet the government’s requirement above, and partly because the banks require much more collateral from their customers, and also because the customers are themselves becoming more risk averse and not asking for loans.
Until this conflict is sorted banks have little interest in restructuring; and nor will the government, until the euro crisis is over. Meanwhile large quantities of monies are accumulating in bank vaults, and not being invested productively. Worse banks in Europe are beginning to refuse to lend to other banks as banking confidence falls. One German bank will now only lend to banks in Poland and Germany. This autarky is not only dangerous; it puts bank restructuring in the shade.
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