G7 Discussed Eurozone’s Worsening Debt Crisis

The markets are now at a point where they can see clearly that some form of policy response is about to come. The action maybe coming from QE3 from Federal reserve, the EZ on Spain and from general release of more spur from the ECB.

Yesterday, Financial Ministry and central bank presidents of G7 discuss through an emergency conference call  the Eurozone’s worsening debt problems. The private conference includes officials from the US, Germany, Japan, France, United Kingdom, Canada and Italy. The G7 discussion focus on the European Central Bank (ECB) meeting or even action Quantitative easing (QE) from the Fed, show that markets are at a very serious stage in the debt crisis. United states officials stated that they expect more action to make Euro banking system stronger in the next 2 weeks  prior to the meeting of the G20 leaders which would be held later this month at Cabos, Mexico.

Decisions on what to do from policy makers will most probably be time-consuming, it will take longer time than the market require, which means that there is a possibility of a large correction in risk that is waiting to happen.

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