Top College News Subscribe to the Newsletter  Europe ponders
'banking union' to avert further euro crises
Published: Thursday, May 31, 2012  Updated: Thursday, May 31,
2012 13:05   LOS ANGELES — European leaders called Wednesday for
the 17-nation eurozone to create a "banking union" to
collectively stabilize struggling financial institutions and
protect national governments from taking on excessive debt to
bail out their banks.  The proposal of the European Commission
was spurred by mounting fears that Spain, the fourth-largest
economy among the nations that use the euro currency, can't
afford to recapitalize banks staggering under the weight of bad
loans issued during a building boom that went bust with the 2008
recession.  If the Spanish government is left to bail out the
nation's banks, the government itself risks becoming insolvent.
Its borrowing costs have risen to record highs on fears that
Spain could be the next eurozone member to need a bailout. Spain
last week promised troubled lender Bankia nearly