Europe prepares to come clean on hidden bank losses

Euro zone countries will consider on Monday how to pay for the repair of their broken banks after health checks next year that are expected to uncover problems that have festered since the financial crisis.  Nobody knows the true scale of potential losses at Europe’s banks, but the International Monetary Fund hinted at the enormity of the problem this month, saying that Spanish and Italian banks face euro 230 billion ($310 billion) of losses alone on credit to companies in the next two years.

Yet five years after the US demanded its big banks take on new capital to reassure investors, Europe is still struggling to impose order on its financial system, having given emergency aid to five countries.  Finance ministers from the 17-nation currency area meeting in Luxembourg will tackle the issue of plugging holes expected to be revealed by the European Central Bank’s health checks next year.

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