Feb. 20 (Bloomberg) -- Europe’s banking system faces growing risks that may require a region-wide effort to stabilize financial markets, said New York University economist Nouriel Roubini.
“The banking problem in Europe is becoming more severe,” Roubini said in a Bloomberg Television interview.“You have a series of countries that are really in trouble,” Roubini said, citing Latvia, Estonia, Lithuania, Hungary, Belarus and Ukraine.
European lenders are taking steps that could increase state control of banks as the recession deepens. German Chancellor Angela Merkel’s cabinet approved draft legislation this week allowing for the takeover of Hypo Real Estate Holding AG, paving the way for the first German bank nationalization since the 1930s.
Roubini said European nations collectively may go further and assist member states that are unable to rescue their own banks. “Even the European Union now is thinking of helping those sovereigns and their banking systems,” he said.
