This book will address and answer the key questions...What's a zombie bank? When losses of a financial institution exceed its paid-in capital, it's insolvent. Thanks to systemic deregulation in the last 30 years and cheap credit availability, banks in the U.S. and Europe borrowed more and more on a thin layer of equity, funding the explosive growth of their housing markets through securitized mortgages and piled many of the mortgage-related securities on their balance sheets. Why do we keep them alive? For many of these banks, having become too big to fail is their blessing. The global financial system has become so interconnected that the failure of one giant bank like Citi would have repercussions far and wide. How does that hurt economic recovery? The banks have been making profits thanks to this interest rate subsidy at the expense of taxpayers, pensioners and other savers. Yet their hidden losses are so big that it will take them many more years to replenish their capital to the necessary level. So they need to keep hoarding all the cash they make to themselves, and cannot make new loans. That hurts market liquidity, which slows and flattens growth. What needs to be done? The U.S. and the EU need to face the harsh reality in the face and accept the bitter medicine rather than push the problems out to the next decade, which will be lost if they do so. Effectively, austerity measures.