But safer, less indebted banks are better able to continue lending without becoming distressed or needing support.

Thus, in addition to an orderly resolution regime for banks, Europe must also implement early orderly restructurings of distressed sovereigns public debt.

While there is a price today that reflects those expectations, it is not a price at which distressed banks want to sell.

Not all banks voluntarily loaded up on distressed government bonds some were pressured by supervisors, others by governments but many have made unwise bets.

But if systemic risk emerges in ways that are not yet fully understood, smaller banks may all fail or become distressed simultaneously, damaging the real economy.

The money for recapitalizing distressed banks would now come primarily from creditors, not European taxpayers, with a pecking order to specify which lenders would be repaid first.

Externally, in turn, other European banks would be affected. But more importantly, other debt distressed countries at least Ireland, Portugal, and Spain would be vulnerable to financial contagion.

Breaking the negative feedback loop between distressed sovereigns and distressed banks whereby bank rescues exhaust fiscal resources and make it likely that the next financial institution in trouble will not be able to count on government support requires ensuring that it will not recur even in extreme circumstances.

Some distressed banks clearly possess large quantities of mortgage backed securities, and are holding onto them in the hope that their prices will rise in the future, saving them from failure.

Europe must break the vicious circle linking distressed sovereign borrowers with banks that are obliged, or at least encouraged, to buy their bonds, which in turn provide the funding for bank rescues.

Throughout the crisis, it has been widely assumed at least so far that the eurozone core would remain solid, and would continue to write the checks for the periphery s distressed governments and banks.

Throughout the crisis, it has been widely assumed at least so far that the eurozone core would remain solid, and would continue to write the checks for the periphery s distressed governments and banks. That assumption appeared plausible.

For example, in financially distressed Spain, unemployment now exceeds 20 .

And man cries ( distressed ) ' What is the matter with her ? '

And man cries ( distressed ) ' What is the matter with her ? '

But safer, less indebted banks are better able to continue lending without becoming distressed or needing support. As a result, they are less likely to destabilize the global financial system or impose harm on most shareholders and the public.

But the declining value of their sovereign debt and the size of that debt relative to that of Europe s smaller distressed countries implies much greater erosion of banks capital base, raising the additional risk of liquidity problems and further economic damage.

Fiscal transfers from more prosperous areas to lagging or distressed regions.

Do not grieve over them , nor feel distressed at their schemes .

Do not grieve over them , nor feel distressed at their schemes .

These are the right principles. They could be applied more effectively by capitalizing the institutions that are burdened by distressed securities directly rather than by relieving them of the distressed securities.

Distressed or underwater homeowners do not invest much in maintenance or improvements.

For this is not that others may be eased and you distressed,

This is the rule set out by Walter Bagehot more than a century ago calming the markets requires central banks to lend at a penalty rate to every distressed institution that would be able to put up reasonable collateral in normal times.

The European Union has finally committed itself to helping its financially distressed members.

It could also be relevant to purchases of debt from distressed member states.

And do not grieve upon them , nor be distressed because of their scheming .

( O Prophet ) , do not grieve over them , nor be distressed at their designs .

Do not be sorry for them , nor be distressed for what they devise .

We do indeed know how your heart is distressed at what they say .

We do indeed know how thy heart is distressed at what they say .

And do not grieve upon them , nor be distressed because of their scheming .

( O Prophet ) , do not grieve over them , nor be distressed at their designs .

Do not be sorry for them , nor be distressed for what they devise .

We do indeed know how your heart is distressed at what they say .

We do indeed know how thy heart is distressed at what they say .

They were distressed because they were confident. They came there, and were confounded.

First, in the Greek case, there is the fear of contagion to other distressed European economies, such as Portugal and Ireland, or even Spain and Italy. There are also substantial investments by American money market funds in instruments issued by some of the exposed banks.

Do not grieve over them , and do not be distressed by what they contrive .

We have not sent down to you the Qur 'an that you be distressed

And grieve not for them and be not distressed because of what they plan .

Do not grieve over them , and do not be distressed by what they contrive .

We have not sent down to you the Qur 'an that you be distressed

And grieve not for them and be not distressed because of what they plan .

The risk premia that financially distressed countries must pay remain high and signal continuing risk.