Euro Declines on German Bad Debts

The euro fell against the US dollar on news that Germany’s banks have a mounting pile of bad debts.

The country’s financial regulator, BaFin, has released its annual report, and this included the advice that if banks there do not take the – heavily criticised – government protection plans, then they face damning from the markets.  The president of BaFin, Jochen Sanio, used harsh terms to describe the dire amount of toxic debts that the banks are carrying on their portfolios.

The IMF has, as reported, called for stress tests to be carried out on Europe’s banks as per those carried out in the USA, and since BaFin’s report it may be yet more necessary to do this.

The currency market showed a decline in the euro to $1.3947, down from $1.4017 on Monday.

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