Jag har läst John Plender i åtminstone 10-20 år.
Hans artiklar är påfallande ofta lysande.
An excellent article, as so often by
John Plender, Financial Times 12 July 2011
Undercapitalised banks are supporting over-indebted governments by holding their IOUs; over-indebted governments are supporting troubled banks; and there is insufficient equity in the European banking system to absorb the losses implicit in the solvency gap.
The outcome is that the European Central Bank ends up providing liquidity on an open-ended basis to the peripheral countries to keep their banking systems afloat at the cost of an ever weaker balance sheet.
The one surprise in all this is that more of the retail deposit base of southern Europe has not disappeared in capital flight.
The taxpayers of northern Europe do not want to bail out what they perceive to be profligate and lazy southern Europeans.
Yet their elected politicians cannot contemplate the alternative of sovereign default because that would put the whole European banking system at risk.
Read more here