European Commission Dashes Bank Recap Hopes

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Photo: thecrazyfilmgirl via flickr

Remember that headline about the European Commission considering direct bank recapitalization from the new European bailout fund, the European Stability Mechanism?Well so much for that hope.

According to Reuters, the European Commission is now saying that it does not see this happening.

It is unclear whether their opinion on direct bank recapitalization has changed. The Commission very tentatively supported consideration of such measures in its most recent policy statement yesterday.

In reality, analysts give little weight to what the EC has to say, as it does not imply support from the more important European policymakers—countries’ leaders and the European Central Bank.

The euro dove back under $1.24 on that headline.

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