The balance sheets of European banks are piled high with legacy assets -- mortgages, real-estate, and other loans--that are tying up precious capital and constricting the banks' ability to make new, more productive loans.
At the same time, the banks' traditional sources of funding--other banks and institutional investors--have begun drying up as the European crisis intensifies.
This leaves the banks desperately needing to raise cash to survive.
The first plan was to sell off the crap assets.
But according to Gareth Gore in the International Financing Review, this plan has failed, because buyers won't pony up the prices the banks want them to pay.