Policymakers’ response to the financial crisis was to recapitalize.........

Policymakers’ response to the financial crisis was to recapitalize the banks and transfer risk to the public sector. This is now coming back to haunt the banks,  as they hold so much government debt and the governments themselves are in no position to offer renewed support.
Hence, I expect a further near- to medium-term escalation of the euro zone crisis involving the default of a sovereign in, and the possible departure from monetary union of, at least one country.
By the same token, I guess the Fed is now going to be taking huge piles of your money and loaning it to commercial banks in Europe. The Congress cannot overrule this decision. Neither can Barack Obama. Because it has so much power and there are basically no significant “checks and balances” on the Federal Reserve. If you don’t like the fact that the Federal Reserve is racing in to help big foreign banks survive the European debt crisis that is just too bad. The Federal Reserve pretty much gets to do whatever it wants to do, and the folks over at the Fed simply do not care whether you like that or not.
The Federal Reserve and other major central banks around the world decided that lending big European banks gigantic piles of dollars would be a good idea, so they are just doing it........... http://tinyurl.com/7wdtzs2