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Germany

The Central Bank Dilemma: So Much Money, So Little Leverage

By acting more like its American counterpart, the European Central Bank (ECB) can help calm the continent’s shaky markets. But don’t expect it to “solve” the crisis – at least not without cooperation from Europe’s stingy commercial banks.

The Europen Central Bank (ECB) in Germany
The Europen Central Bank (ECB) in Germany
Hans von der Hagen

MUNICH -- The weakest link in a chain, or so the saying goes, is the strongest. In the present crisis, the weakest link is the banking sector. Indeed, all discussions about how to solve the reigning chaos end with the question: What about the banks? If Greece goes belly up, or the euro crashes: What about the banks?

But the real question, which is what the banks could do to help solve the crisis, isn't even being asked anymore. Maybe that's because it has become apparent that banks in their present structure are quite simply not equipped to deal with major faults in the financial markets.

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In The News

War In Ukraine, Day 126: Russia Watching NATO, As Path Cleared For Finland And Sweden To Join

As NATO leaders meet in Madrid, Finland and Sweden look much closer to joining the alliance after Turkey dropped its objections to their membership. It's yet another momentous change underway since Russia's invasion of Ukraine.

International leaders after having their photograph taken before the start of the NATO 2022

Anna Akage, Shaun Lavelle, and Emma Albright

A high-stakes NATO summit has kicked off in Madrid, as leaders of the world’s largest defense alliance discuss the war in Ukraine and key decisions that will shape the organization’s future direction. NATO Secretary-GeneralJens Stoltenberg said the Russian invasion of its neighbor had prompted a fundamental shift in its approach to defense.

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Finland and Sweden look much closer to joining the alliance after Turkey dropped its objections to their membership. The three countries released a joint memorandum that “extend[ed] their full support against threats to each other's security," FinnishPresident Sauli Niinistö said.

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Central to the tragic absurdity of this war is the question of language. Vladimir Putin has repeated that protecting ethnic Russians and the Russian-speaking populations of Ukraine was a driving motivation for his invasion.

Yet one month on, a quick look at the map shows that many of the worst-hit cities are those where Russian is the predominant language: Kharkiv, Odesa, Kherson.

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