Europe's financial crisis intensified as banks moved to obtain more dollars for loans to their U.S. customers, and some nervous corporate clients began looking to banks outside the euro zone for loans.
Some of Europe's biggest banks are taking steps to shore up their defenses should the debt crisis spiral out of control and one or more countries leave the euro zone.
BERLIN (AP) -- The IMF singled out European banks as it insisted Wednesday that more needs to be done to shore up the global financial system, saying Europe's weak banks are "caught in a maelstrom" and must beef up their financial buffers.
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Europe on Monday announced a trillion-dollar rescue package for crisis-hit euro countries backed by the IMF and central banks worldwide, sending the euro surging in Asian trade.Leaders hope an unprecedented international intervention, officially running to more than 750 billion euros, will represent a game-changing financial war chest.Essentially, Europe wants to leverage vast borrowings to prop up nations the way governments did their banks during the global economic financial crisis -- keeping interest rates down.
The interconnectedness of global finance is a truism. This has led many to suppose that U.S. banks could be badly hurt by the crisis currently unfolding in Europe. I believe that the threat to U.S. banks deriving from the crisis in the Old Continent has been somewhat exaggerated. First, the direct exposure of U.S. banks to sovereign bond or private lending markets in Europe is small. U.S. banks have limited exposure to European credit, and much of this exposure has been reduced in recent months. U.S.
