CitigroupCEO Vikram Pandit told CNBC that the solution to the grinding European debt crisis requires dealing with the region’s sovereign debt ‘en masse.’ “Our fear is that markets move faster than policymakers,” Pandit said.
While some actions like a bond purchasing program through the ESFS are being contemplated, they only buy time. Pandit said the markets would like to see a more comprehensive approach.
“When you look at the full range of the debt that needs to be refinanced by Italy, by Spain, by Greece, by the other two Southern European countries, add it all together, it’s about a $1.5 trillion that needs to be refinanced over the next three years,” Pandit said. There are problems in the banking systems of some of these countries that also must be addressed, he added.
By comparison, the United States is in a much better position. Pandit highlighted declining corporate, individual and financial system debt levels in particular. “The last part of the cycle is always government leverage,” he said.