This bank recapitalization would ultimately lead to the nationalization of the banks.
Last week was one big build-up to a supposedly massive new bail-out package that would span bank recapitalization, sovereign debt purchases and other measures.
On Friday, the EU Commission welcomed the result of the stress tests, noting that bank recapitalization could begin in November, according to Trade the News.
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They have a window of opportunity in the first months of 1999 to make the hard choices on bank recapitalization, a new central bank law, problem loans and forced consolidation.
These days, government spending is almost never uncontroversial - not the bank recapitalization, not the cheap credit for small- and medium-scale enterprises, not even the subsidized food and employment programs.
The IMF chief, to her credit, was early in the latest phase of the crisis to call for greater bank recapitalization, which would involve an admission of losses and therefore more political and financial pain.
They argue nations involved in the economic discussions this weekend must make a coordinated effort at bank recapitalization as well as a shared commitment to solving cross-border financial issues, such as dealing with non-U.S. banks that hold a significant amount of American paper.
According to confidential European Union documents, the conditions for bank-recapitalization loans would mostly be directed to specific institutions and the financial sector.
There is now an international consensus on the measures needed to halt the immediate crisis: Massive bond buying by the European Central Bank, the direct recapitalization of banks by bailout funds and the creation of common euro-zone bonds.
Purchasing by the ECB and a newly minted ESM bank will end the recapitalization death spiral experienced by banks and sovereigns additional purchases in the secondary market by the ECB will effectively cap bond prices due to its ability to print, investors would stop selling sovereign bonds because a floor would be in place all without having to purchase any bonds and mitigating potential crisis.
In the meantime, the major banks must be put under the direction of the European Central Bank in exchange for a temporary guarantee and permanent recapitalization.
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They are busy promoting the line that any bank losses need to be made up via a tax-payer-funded recapitalization, usually on terrible terms that amount to little more than theft.
We will work with you to ensure that the Inter-American Development Bank can take the necessary steps to increase its current levels of lending and to carefully study the needs for recapitalization in the future.
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