Leverage is a cruel beast when your assets are collateralized junk from Greece, Ireland, Spain and Portugal.
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The European Central Bank is "looking increasingly vulnerable" and may face "hefty losses" as a result of propping up indebted eurozone countries, a leading think-tank has warned.
The International Monetary Fund's partner in the recent international bail-out missions is itself in danger of becoming a liability, Open Europe has argued.
In a report published on Monday entitled A House Built on Sand?, Open Europe has calculated that the ECB has a total exposure of about €444bn (£397bn) to "struggling eurozone economies."
The bank is now "23 to 24 times levered" as a result of bailing out Greece, Ireland, Portugal and Spain.
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