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Here’s the Story that Made the Markets come Surging Back

EU leaders are actively looking for ways recapitalize European banks in a coordinated plan, according to an FT report. Finance ministers concluded that banks are suffering from funding concerns and that markets will need to be convinced they can withstand the crisis.

The Dow has bounced back over 200 points since this report surfaced.

“Capital positions of European banks must be reinforced to provide additional safety margins and thus reduce uncertainty,” Olli Rehn told the FT. “This should be regarded as an integral part of the EU’s comprehensive strategy to restore confidence and overcome the crisis.”

While Rehn and others have admitted to funding problems in European banks before, this time he suggests that Europe — rather than just member states individually — must take “a concerted, co-ordinated approach” to stem bank fears.

German Finance Minister Wolfgang Schaeuble added that Berlin could reactivate capitalization mechanisms put into place in 2008.

Even though markets are bouncing back, however, the details of any plan to recapitalize the banks are unknown. Any coordinated measures would likely need approval from national governments, something that the finance ministers meeting today can’t promise.

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