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November 10, 2011 at 07:22 AM
Phil Angelides, chairman of the Financial Crisis Inquiry Commission, says he believes the current European plan to recapitalize banks is too small.
“It’s very clear that the recapitalization of banks and the bailout fund aren’t large enough to sustain Italy,” let alone Greece, Angelides told Bloomberg Television’s Lisa Murphy on Wednesday.
Angelides, who is the son and grandson of Greek immigrants, said he has a personal stake in the events that have recently unfolded in Greece.
“I’ve been following the eurozone crisis very closely, not only for the implications in Europe, but the spillover effects here,” he said. “I happen to be proudly of Greek descent. My mother grew up in Alexandria, Egypt. My grandparents on my dad’s side came here from Greece, and we have many family members there.”
Looking at the last two weeks, he said it’s clear there are still unsustainable levels of debt, and “painful” deleveraging will continue.
“Up until now, all that pain [has been] borne by the borrowers here in the United States, underwater homeowners, very little by the lenders,” he said. “But take the recent, I guess, deal in Europe to stabilize the situation. They are going to reduce Greek debt to 50%. Greece can’t do that, because even with that they end up with 120% debt-to-GDP. It’s very clear that the recapitalization of banks and the bailout fund aren’t large enough to sustain Italy.”
