The conflagration in European financial markets has been gaining steam due to the ineffective policymakers. The lack of a TARP-like program has investors and market participants questioning European banks capital. The threat of a run on the banks is significant and the longer policymakers wait to address the situation the more expensive this issue ultimately will become. The LTRO program did a wonderful job boosting liquidity but the program itself was inadequate because it didn’t address the capital issues.
INVESTING IN THE FINANCIAL MARKETS INVOLVES RISKS. OPTIONS ARE NOT SUITABLE FOR ALL INVESTORS.