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Europe Facing Liquidity 'Meltdown': BlackRock's Fink

Europe is "facing a meltdown in liquidity" affecting every member of the European Union except Germany, BlackRock CEO Lawrence Fink warned CNBC Tuesday.

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"We need to focus on what’s going on with the other countries now, not just Italy," said Fink, whose company manages $3.3 trillion in assets worldwide.

"Everyone [focused] on Greece a few months ago [when] you should’ve have been focusing on Italy. Now people are focusing on Italy and now we need to pay attention to these other countries" whose sovereign debt may be downgraded.

"If you look at the bond market, the bond market is saying they’re going to lose their triple-A" rating, Fink said. "Some of these triple-A credits are going to be downgraded to double-A plus."  

With Basel 3 capital requirements looming, banks are realizing their sovereign debt holdings "may not be an asset that they want to have" on the books, and that means an "asymmetric amount of selling versus buying," Fink said.

Unlike the U.S., where the Federal Reserve and Treasury Department bought surplus debt, in Europe is "there’s going to have to be a need to buy all this debt that is sitting on the banks’ balance sheets…And at the same time these governments are going to have to find ways to manage their budget deficits and try to find a growth agenda," the BlackRock CEO said.

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