Publication

What began as a 'subprime' crisis in the US has clearly mutated into a crisis of financial markets around the globe. Why did this happen? The answer lies in the evolution of the European banking market since the introduction of the euro. A small number of banks grew into large, internationally integrated banking groups which are obviously too big to fail, but also close to being 'too big to be saved', by any single national government. However, this would by its own not have precipitated a crisis if these institutions had been solidly capitalized.