It is almost two years ago that the former Bank of England Governor Mervyn King predicted advanced economies would probably not be able to get out of the current crisis without  large debt restructurings and a recapitalization of the financial system (read banks).

In this Bloomberg article he is quoted as saying;

“I am not sure that advanced economies in general will find it easy to get out of their current predicament without creditors acknowledging further likely losses, a significant writing down of asset values and recapitalization of their financial systems,” he said. “Only then will it be possible to return to a more normal provision of the vital banking services so crucial to an economic recovery.”