Regulators encourage banks to buy government debt, analysis finds

06/1/2012 | CNBC

A Citigroup analysis found that regulators in the U.S. and Europe are encouraging banks to purchase governments bonds. The situation could exacerbate the debt crisis, according to the analysis. "Specifically, having banks loaded up with domestic sovereign debt will only increase the domestic fallout if the sovereign ultimately reneges on its obligations," Citigroup strategist Hans Lorenzen said.

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