Fixing European Banks With a U.S.-Style Solution? Not So Fast
ByThe U.S. began fixing its banks in the 2008 financial crisis by forcing them to take a bailout. While some European countries rescued their troubled lenders, officials hoped that others would digest their soured loans when the economy bounced back. Many didn’t and now investors are asking whether Europe will follow the U.S.
How did the U.S. recapitalize its banks?
Lawmakers created the Troubled Asset Relief Program, or TARP, in October 2008 to buy their stock and troubled assets after the collapse of the housing market wiped out Lehman Brothers Holdings Inc. That propped up struggling lenders, helping to restore confidence that enabled banks to raise more than $100 billion in new capital from private investors. The Treasury Dept. ultimately recouped the biggest TARP bank bailouts, making billions of dollars of profit into the bargain…
Fixing European Banks With a U.S.-Style Solution? Not So Fast
