The Telegraph reports a EUR 2 trln plan is in the works to recapitalize the banks, leverage the EFSF and undertake a “controlled” Greek default.
At first blush, it appears the plan will rely on leveraging the already woefully small EUR 440 bln EFSF. It does not appear the plan is ready for prime-time but will be fleshed-out ahead of another G20 meeting in France in early November.
We’ve seen a hundred false dawns in this crisis before, so until we see a plan in full, retain skepticism.
