Will this plan work? Or, will it destabilize Eastern Europe?

“Banks must first attempt to raise the cash from the markets, but they must not do so by pulling funds from their subsidiaries, a requirement insisted upon by eastern European states many of whose banks are owned by major financial institutions situated in the heart of Europe.

“During the 2007-2008 financial crisis, eastern European banks were destabilised when their western parent banks withdrew investment from the region to protect core operations.

“This time around, central banks in the east will monitor capital flows from core banks and if they are not maintained at current levels, they will now be able to intervene to halt such losses.

- EUobserver.com / Economic Affairs / EU agrees to fresh bank bailouts

Notes