The billionaire investor George Soros said he believes in the ability of Greece to remain in the euro area. He also said that the eyes of market participants are currently targeting the debt problems of several countries, including Greece stands in the foreground. “I believe that Greece will do whatever is necessary to meet the requirements to remain in the euro area,” said Soros told reporters in Jakarta. Among the main reasons the country is fighting for his membership in the euro area is that when the ECB adopts its bonds as collateral for a loan of commercial banks. In the event that the country lost the credit rating, however, its securities will no longer meet the necessary conditions and will not be accepted as collateral. “Support in Greece aims to achieve, I hope the EU, the ECB and the euro area to find a way to finance the country which is not too expensive to support,” said Soros, quoted by Bloomberg.
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The legendary investor George Soros called from Davos to radically reduce the size of banks that are too big to be allowed to fail transmitted BBC. At the World Economic Forum, he spoke in support of U.S. President Barack Obama in his attempts to separate commercial and investment banking. According to him, however, even after such action, most investment banks will still remain too large to fail. To control these banks, all major economies need to rally around strict rules to limit the risk – how much money banks can borrow to invest, “said billionaire. He acknowledges that it will be difficult to determine the exact ceiling on leverage, but that governments have enough time to develop a global regulatory framework. George Soros called the current economic crisis “super bubble” which was created by the system itself, and was the culmination of a series of smaller balloons in the last 25 years, and unsuccessful attempts to remove them. They add balloons were caused by facilitated credit and high financial leverage. As regulators and bankers were wrongly believed that markets are efficient, Soros continued, and were blinded by ideology that they should always be less regulated. And when the bubble burst, governments and regulators to further worsen the situation by reducing interest rates make money cheaper and thus to the mortgage crisis in the United States, which rocked the entire financial system.
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