ECB warns of ‘doom loop’ between banks and governments that led to Ireland’s bailout a decade ago

ECB warns of 'doom loop' between banks and governments that led to Ireland's bailout a decade ago

The “doom loop” between the banks and the governments that dragged Ireland out of the EU / IMF rescue operation is being repeated this time. The European Central Bank (ECB) has warned that Kovid’s actions could link debt-ridden countries to risky businesses through loans and credit guarantees.

Its latest Financial Stability Review says businesses, including Ireland’s debt-funded stimulus package and $ 2 billion loan guarantee scheme, are helping businesses and employees cope with the epidemic, but prolonging action or dragging out too soon could lead to a crisis.

“The sharp rise in corporate and sovereign debt means the growing risk of financial stability from the emerging sovereign-corporate banking nexus in the medium term.

Written By
More from Jake Pearson
Tax evasion, hell (sometimes) with good intentions
Early October, publication Pandora Papers Public opinion was once again shocked by...
Read More
Leave a comment

Your email address will not be published. Required fields are marked *