Bailout fears loom over European banks

Fears over liquidity and sovereign debt contagion mean the threat of nationalisation has spread to leading players in Europe's banking sector.

The world’s central banks joined forces to provide extra dollar liquidity to the market last week in an attempt to ease pressures on European banks. Eurozone financials saw significant share price falls in September amid increased fears over their funding requirements. IMF head Christine Lagarde said European banks need mandatory and urgent recapitalisation, “seeking private resources first, but using public funds if necessary”. European politicians dismissed the suggestion, pointing to the results of the summer’s stress tests, but shares in Société Générale and other French banks hav...