European banks were too large for any national sovereign to rescue

Evidence

In sum, in each country, and across the Eurozone as a whole, European banks have become too big to bail. No sovereign, even with its own printing press, can bail out a bank with exposures of this magnitude. If you have signed up to a currency arrangement whereby you gave yours away, you really are in trouble. As Simon Tilford and Philip Whyte put it bluntly, the Eurozone crisis is “a tale of excess bank leverage and poor risk management in the core … [and] the epic misallocation of capital by excessively leveraged banks.” — Mark Blyth, Austerity, 231

Categorization

• XREF: The insight that surrendering a national currency removes the last-resort bailout tool directly parallels the US chapter’s question of whether the Fed’s printing press was itself the escape valve — focal point for assessing the austerity debate in Mattei. — connects to: European austerity serves to reserve sovereign balance-sheet space for too-big-to-bail bank rescues — Mark Blyth, Austerity: The History of a Dangerous…, 617; European banks are too big for any single government to bail out — Mark Blyth, Austerity: The History of a Dangerous…, 37; European banks are collectively too big for any sovereign to bail, forcing austerity instead — Mark Blyth, Austerity: The History of a Dangerous…, 207 (+7 more)

Broader Connections

• European bank exposure to periphery sovereign debt reached dangerous multiples of national GDP #expands (0.90) — Mark Blyth, Austerity, 239
• The European debt crisis resulted from banking losses, not sovereign overspending #corroborates (0.82) — Mark Blyth, Austerity, 40
• Downgraded sovereign debt collateral trapped leveraged European banks in a funding spiral #expands (0.78) — Mark Blyth, Austerity, 238
• Governments mislabel banking rescues as sovereign overspending because honesty would be politically fatal #complicates (0.75) — Mark Blyth, Austerity, 242
• Neoliberal corporate theory was deployed to defend Too Big to Bail banks #corroborates (0.72) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 176