Policy 2 - Tackling the banking sector crisis
Institution: The European Financial Stability Fund.

Summary: The purpose of Policy 2 is to cleanse the banks of questionable public and private paper assets so as to allow them to turn liquidity that comes their way in the future into loans to enterprises and households. The problem, currently, is that if banks are submitted to rigorous stress tests, several may be found to be bankrupt. Thus, Europe needs simultaneously to lean on them to come clean but also to help them do so without insolvency.