As more details on the EU banking supervision plans emerged at the EU leaders summit last week, it is becoming clearer that the EU is banking on the ESM to finance the transition out of the Eurocrisis. Is this realistic? We believe not. In this Market Insight we put forward the risks of the current ESM set up and our ideas as to how the ESM could increase its firepower without overburdening the EU countries’ sovereign debt ratings. Structured Finance can help!
