2012年6月13日星期三

Krugman: The Troubled Asset Relief Program (TARP) Comes to Europe


Troubled Asset Relief Program (TARP) Comes to Europe
Paul Krugman
Well, Spain has been bank bailouts. The relief is basically the same as the TARP (Troubled Asset Relief Program) with the United States: Spain, a government agency, will bank the money, said to be in exchange for partial ownership, its goal is to make savings and bank lenders convinced that, even if these banks eventually huge losses, their capital is still safe; The key is these losses initially be compensated from the new cash reserves and, therefore, will not happen debt default.
The problem is that the Spanish Government to lack of funds, loans from the market must pay high interest, therefore, this part of the funds is a loan from the strength of the more powerful European countries, the interest rate may be lower than the market.
People should ask, this approach to solve what problem? May only may temporarily end funds fled the Spanish banks, forcing banks to sell assets to promote the fall in asset prices and create more information about the solvency of doubt "doom loop". (If the split of fear involved in Euro rather than breach of contract, what role in this regard.), However, to restore the competitiveness of Spain or to alleviate the suffering caused by the tightening of fiscal policy, this measure did not work.
Therefore, the whole incident up with the money to buy the event - as the European Central Bank's loan scheme since last fall. Use this time in Europe can do? If past behavior is the problem, then the answer is, nothing.

没有评论: