ECB's Trichet sounds alarm over Europe's credit contraction

Telegraph
"The eurozone's financial system is under "severe strain" and risks setting off a downward spiral as the banking crisis and economic recession feed on each other, according to European Central Bank president Jean-Claude Trichet. ..Professor Tim Congdon from the London School of Economcs said the contraction of eurozone credit was "extremely disturbing" but inevitable after moves in October to force banks to raise their capital ratios. "It was a catastrophic decision," he said."
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ECB faces mutiny from national bank governors as recession deepens
"The credit default swaps that measure bankruptcy risk on the debts of Ireland, Austria and a clutch of Latin Bloc states have vaulted to dangerous levels. In the case of Ireland, the slump is spilling on to the streets. Some 120,000 marched through Dublin over the weekend to protest austerity measures."