European debt crisis

Global Business

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The situation in Europe might be worse were it not for a system that was created to clear transactions between central banks. That system is now providing loans to central banks of countries whose banks are suffering withdrawals. The money comes from the central banks of nations with healthier banks, like Germany, the Netherlands and Luxembourg.

Germany already has substantial exposure to the weaker economies, which is one reason it has been reluctant to agree to issue pan-European bonds.

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