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Citigroup Study: Banks Buying “Sovereign Debt” Causing Financial Crisis

“According to Citigroup, US and European regulations force banks to purchase government debt; which will only lead to the debt crisis worsening.

Citigroup conducted a study that showed regulators mandate banks to buy government debt against internal capital requirements. Yet other rules facilitate the stability of the government bonds market.

In this scenario, the government issues more debt that ultimately will result in the economic destruction of governments. While they are unable to produce bond payments, this leaves banks with the unfortunate reality of billions of dollars of “toxic debt” Hans Larenzen, Citigroup strategist claims.”

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