European Banking Crisis Could Spread to U.S.
While Washington grapples with a credit downgrade and market turmoil, the Euro crisis has returned with a fury. Just weeks after Europe fashioned yet another plan to avoid a Greek default on its sovereign debt, global financial markets are now demanding that Italy and Spain pay more to borrow money -- and they may soon need their own bailouts. The European Central Bank signaled on Sunday that it will invest in European bond markets in an attempt to prop up hard-hit Italy and Spain, Europe’s fourth and fifth largest economies. ECB’s intervention, along with a vow by the G-7 nations to take “all necessary measures to support financial stability and growth appeared to buoy the bonds of both nations, or at least temporarily. Read the full article here.