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.