Euro 30,000 billion (Americans would say 30 trillion) that's the amount of wholesale financing currently on Europe's bank balance sheet. European banks rely far more on wholesale market for their funding -- a consequence of their very high leverage. The problem is that for the past 5 months the wholesale funding market is essentially closed.
Some will have heard of the LIBOR rate that has exploded, and that the Federal Reserve has expanded the dollar lending operations for European banks. The problem is far more severe, because the closure of the wholesale market means that banks have to refinance Euro 800 billion in maturing obligation every single month. Obviously, this is impossible, so European banks are cutting lending (with the obvious economic consequences), they have also been losing deposits to European sovereign institutions -- Siemens transferred several billions to the ECB.
The implications is this liquidity crunch very serious: Businesses will be refused expansion loans, or see lines of credit cancelled outright (the banks need to reduce their borrowings). Obviously, the crisis in confidence started with the "fake" stress test of last summer (Dexia the now bankrupt bank came on top as the best capitalized). The solution is for Europe to follow the American example of 2008 -- for European sovereign institutions to buy new issued Preferred Securities (expensive). The problem of course is that it will reduce bank profitability (a given with lower leverage -- watch out stock prices) but will allow the banks to operate and not face a liquidity crisis (this is a flow as opposed to a stock issue). The problem is the size of the necessary exercise: Euro 2,0000 billion, or 5x what Europe is trying to agree too on the EFSF program. What are the odds that this will have a happy ending?