Eurozone finance ministers agreed last week that the ESM could devote €60 billion of its €500 billion lending ceiling to the recapitalisation of...

Eurozone finance ministers agreed last week that the ESM could devote €60 billion of its €500 billion lending ceiling to the recapitalisation of eurozone banks. However, how much recapitalisation is actually needed? Münchau estimates recapitalisation of the European banking system to require a minimum of €1 trillion, far short of the ESM's mooted €60 billion. He points out that there are large 'hidden losses' in the banks' balance sheets which remain undetected by the ECB. This is evidenced by the sheer number and scale of accumulated crises during which European banks have managed to lose money in recent years.(VIEW LINK)