Greek economist calls for a European NAMA to solve banks crisis
Published 16/09/2011 | 05:00
THE European authorities should consider a "pan-European NAMA or TARP" that would capitalise the European banks on a compulsory basis, a leading Greek economist said last night in Dublin.
Yanis Varoufakis, professor of economic theory at Athens University, said an agency should be set up to capitalise the banks, like TARP (Troubled Asset Relief Programme), which was set up in the US at the height of the financial crisis.
He said that while doing this would force losses on those holding bank shares across Europe, it was a price worth paying.
Once banks were capitalised adequately, said Mr Varoufakis, they could deal with sovereign write-downs and other bad debts.
He said the initiative would have to be done at a European level, most likely by the European Financial Stability Fund (EFSF).
The economist also called for the ECB to be allowed buy up bonds across Europe. He was speaking at a public meeting, 'Understanding the euro crisis', along with Sinn Fein's finance spokesman Pearse Doherty.