The EU resorts to US bank earnings accounting

The banking shortfall in the EU is estimated to be between $100 bb Euros and over $1 trillion Euros. Why such a wide estimate? Because no one knows or has taken the time to understand exactly how much off the balance sheet exposure these banks have to each other and the failing EU countries. The market is expecting at least the pledged $110 billion Euros to have any sense of confidence in the banking sector, however the Troika's shocking report on Greece Friday showed that things are beyond any nightmare scenarios previously imagined. As one Finance Minister put it, Greece alone could swallow the entire EFSF in one gulp and there would be no money left for other countries or banks.

So the EU in a bid to manage expectations and hope the headline scanning algos don't go any deeper then headlines, have decided to count or double count all money lent so far to the PIIGS which has been pledged to recapitalize banks, taking the $110 bullion number down to about $60 billion.  Do they really think this will fly? The market expected new capital not already pledged capital.

It seems like the enormity of the task is finally sinking in and the bottom line is, there just isn't enough money.