The European banks are finally starting to face reality. Provisioning against potential losses is the first step toward a comprehensive restructuring and final solution to the European debt crisis. Taking losses, suspending dividends, and limiting bonuses are painful for the banks but a necessary step in the right direction.
Societe Generale also announced it sold over €10 BN of legacy assets between July 1st and November 1st and has reduced its GIIPS [PIIGS] sovereign risk exposure to €3.4 BN. This would never have occurred if the banks thought the bailouts would continue without any private sector involvement. The incrementalism of Merkel, the physicist, continues.