In an interview with CNBC on Monday, famed investor Warren Buffett expressed candid doubt over whether the European Union will survive its current crisis.
This came at the same time that the Federal Reserve announced it will run stress tests on the six biggest U.S. banks for "additional stresses related to the ongoing situation in Europe.''
Buffett on "America vs. EU"
"17 countries in the world gave up the right to issue bonds in their own currency. That is 100 degrees away from being able to issue them in your own currency like the United States," Buffett told CNBC. "The situation there is fundamentally different."
"The system as presently designed has revealed a major flaw. And that flaw won't be corrected just by words. Europe will either have to come closer together or there will have to be some other rearrangement because this system is not working."
Asked whether the union would survive this crisis, Buffett said: "That's in doubt now."
The Federal Reserve also expressed a more implicit doubt about the future of the EU by announcing on Tuesday that it would stress test the six largest U.S. banks for a further escalation of the European debt crisis.
The purpose of the stress tests is to determine whether the banks can raise dividends or repurchase stock.
We list the six biggest U.S. banks below that will be stress-tested in the coming weeks. Do you think they would survive a collapse of the EU? (Click here to access free, interactive tools to analyze these ideas.)
1. Bank of America
3. The Goldman Sachs Group
4. JPMorgan Chase
5. Morgan Stanley
6. Wells Fargo
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Alexander Crawford does not own any of the shares mentioned above.
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