New financial regulations Basel 3 for banks and Solvency 2 for insurers are reinforcing these advantages.

Financial intermediaries showed adequate levels of solvency and high ratios of liquidity in both types of currency, and dollarization of financial claims had declined.

But haircuts in the case of a solvency crisis are indispensable for the stability of the European financial system itself.

Meanwhile, global investors are questioning local governments solvency.

Easing monetary policy won t solve this kind of crisis, because even moderately lower interest rates cannot boost asset prices enough to restore the financial system to solvency.

And then they collapsed, causing enormous damage to the government s own solvency.

And that means that the financial institutions that own them cannot have confidence in the liquidity or solvency of potential counterparties or even in the value of their own capital.

Otherwise, a liquidity run would create solvency problems for all the big eurozone debtors.

Easier monetary policy may boost liquidity, but it will not resolve the solvency crisis.

The same crisis looks like a solvency crisis for those who are geographically distant.

The critical role played by prudential regulation was stressed in this regard. Regulations needed to ensure both the solvency and the viability of financial institutions, and the markets in which those institutions traded.

But the liquidity crunch was not the only problem there was also a solvency problem.

When a sovereign borrower s solvency has deteriorated sufficiently, its survival becomes dependent on market expectations.

If this lending approach to southern countries continues, their solvency and economic recovery will suffer.

And if a European agency is to guarantee banks solvency, that agency must also oversee them.

Today, markets seem to think that large fiscal deficits are the greatest threat to government solvency.

Indeed, more often than not, the banks that failed or had to be rescued in the wake of the 2008 financial crisis had solvency ratios higher than those of banks that remained standing without assistance.

To protect commercial banks from risking their own solvency (and the whole country s solvency besides) once again, Richard Robb suggested that a small tax on banks short term debts be imposed in order to deter banks from over borrowing.

Only a government that is sufficiently powerful, in terms of legal authority and solvency, can do so.

For countries with solvency problems, an adjustment program like those for Greece, Ireland, or Portugal would be appropriate.

The stunning opacity of solvency ratios encouraged regulators to turn a blind eye to banks excessive risk taking.

Without a return to growth, they cannot quell investors doubts about their fiscal sustainability and their banks solvency.

Greece is likely to find itself insolvent, and questions surround the solvency of Ireland and Portugal as well.

IS3.14 In order to maintain solvency of the operation, expenditure levels continue to be subjected to strict rationalization.

It has not, even as the European Union continues to respond inadequately to its own slow moving solvency crises.

Converting some portion of debt to equity under predetermined solvency threatening conditions would provide an extra layer of protection.

A distinction should be made between arrears resulting from a liquidity crisis and those caused by a solvency crisis.

And, if Spain is at serious risk of default, government solvency is at risk throughout the eurozone except in Germany.

Nor is it alone in ignoring the terrible solvency threat they pose and their damaging consequences to saving and investment.

Time and again, banks woes have affected governments borrowing costs, and concerns over governments solvency have affected banks balance sheets.

The ECB s task is to provide liquidity to banks, while the EFSF and ESM are designed to absorb solvency risk.

The poorer an economy s growth prospects, the larger the fiscal correction and deleveraging needed to convince markets of underlying solvency.

Legally, of course, this guarantee is only worth the solvency of the guarantor in this case the near bankrupt Cypriot state.

European growth is constrained by debt problems and continued concerns about the solvency of Greece and other highly indebted EU members.

However, the situation had changed after independence. Women had come out of their households for reasons of economic solvency and survival.

Systemic risk raises doubts about the solvency of over indebted countries, which means that these countries efforts to consolidate their fiscal position and promote reform do not lead to improvement in financial conditions, which is essential for overcoming the crisis and promoting recovery.

My proposal is to use the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM) to insure the European Central Bank against the solvency risk on any newly issued Italian or Spanish treasury bills that it may buy from commercial banks.

The level of uncertainty about asset values, solvency, and the connectedness of balance sheets that prevailed at the time was extraordinarily high.

Doubts about the Irish government s solvency would then disappear quickly, and its guarantee of bank deposits would no longer look so shaky.

Things are trickier when public finances are under acute stress and markets are worried about sovereign solvency, as is the case in southern Europe.

No politician has publicly stated that US solvency requires such draconian adjustments, because the American public is far from agreeing to the sacrifice needed.

But the stress tests and targeted TARP money, the path of least resistance taken, enabled the banks to earn their way back to solvency.

First, the factors which allow a distinction to be made between liquidity and solvency problems are not clearly set. What determines a liquidity crisis?

In some cases, they also face solvency questions, and are far from achieving the socio political consensus needed to get their economic houses in order.

A Greek default would threaten to sink them, too, for it would raise immediate concerns about the solvency of Europe s systemically important banks and insurance companies.