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The crisis, it turns out, is one of a lack of solvency, not just liquidity, and that is why banks fear to lend to one another.
Experts say the lack of solvency has created a domino effect.
The Greek market has been crushed by a lack of solvency, as a credit crunch in the public sector is wounding the economy and threatening the viability of thousands of companies.
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To make a bad situation worse, she had an early pregnancy and became a mother at only 15. "I was about to make the same mistake twice due to lack of financial solvency, but fortunately this was prevented when Mahbuba was selected for the cash support.
Disagreements among national governments have made it difficult to address the core problem, which, he said, is "not lack of liquidity, but of solvency" — that is, not a matter of providing enough cash for short-term operations, but of reducing debt ratios that are simply too high to be managed.
Argentina's government insists its problem lies with liquidity (a lack of cash) and not with solvency (its ability to meet its financial obligations).
Because the problem with the markets isn't just a lack of liquidity — there's also a fundamental problem of solvency.
But the E.C.B. cannot fix banks' solvency problems, the lack of adequate reserves to absorb a big hit to their holdings of government bonds or losses from nonperforming loans.
In light of Greece's deep solvency problems and lack of agreement with its creditors so far, the notion of a voluntary debt exchange is increasingly looking like a mirage.
There is no problem of solvency, even if the most worrying thing is the lack of liquidity and economic growth to drive job creation.
Greece's problem is one of solvency.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com