"Dr. Doom" Roubini: The next euro nation is falling into crisis
Friday, December 17, 2010
Nouriel Roubini, the New York University professor who predicted the global financial crisis, said Spain’s financial troubles, without more assistance, are closer to a critical point than a resolution.
"Spain is too big to fail but also too big to be bailed out," Roubini said today in a Bloomberg Television interview on 'Surveillance Midday' with Tom Keene. He said the existing resources for bailouts are too small "to backstop the Spanish banks and the sovereign if there is going to be a run on them."
European Union leaders will meet this week amid discord about how to stem a debt crisis that’s caused Greece and Ireland to accept bailouts.
"Unless the Europeans this weekend are going to decide to increase the envelope of those official resources, in the next few weeks you’re going to see a worsening of those spreads for Spain," Roubini said, referring to the extra yield investors would demand to hold the country’s debt over that of Germany.
Moody’s Investors Service said yesterday it may reduce Spain’s credit rating from Aa1 by on concern about rising borrowing costs, potential losses in the banking system, and deficits in the country’s regions.
More on the euro crisis:
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Forget Greece and Ireland, this is the only country that matters
Euro CRISIS: Plans for a European "bank mutiny" are picking up steam
Friday, 17 December 2010
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