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Are European authorities fire fighting with no definitive strategy?

As we see the number of European banks hitting trouble increase day by day there is a concern in investment markets that the European authorities are just fire fighting each event as it happens and not putting in place long term strategies which will pick up the whole sector. Is this the right course of action or should they be taking a wider look at the situation?

It is very easy for us to sit back and suggest that the authorities are just fire fighting disaster after disaster after disaster but they do have a very difficult situation to try and contain. We may see the headlines about fire fighting on a daily basis but the truth is that literally billions of Euros have been pumped into the money markets over the last few weeks to ensure they do not freeze up. The impact of the additional funding may be limited but it does ensure that markets at least stay open!

The current situation can be compared to a pack of cards in that as soon as one goes it has a knock on affect to the next one and so on. Stopping this knock on affect is not easy, takes time, planning and substantial funding which is currently being arranged by the authorities. Much like a swan glides across the water, with its legs flapping away out of sight, the authorities are doing a lot behind the scenes.

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