You think it can't happen to you?
British banks were only the second largest "loose lenders", after the German banks, as show in the statistics on Eurozone debt exposure by "bank home country". In fact, British bank exposure to the peripheral countries is larger in relation to its GDP that of German banks. Even French banks were more cautious.
The excessive exposure to the fragile peripheral economies reflects on the quality of the "home rule" prudential regulation of each of the Central Banks who could have curbed excessive cross-border lending.
PPP Lusofonia é um blog de economia e finanças, focado nos serviços públicos e no investimento para o desenvolvimento, e nas PPP. O blog dedica-se a (a) conceitos de economia, finanças e banca (b) às necessidades dos PALOPs e (c)oportunidades de consultoria nos PALOPs, com artigos em português ou inglês. PLEASE USE THE TRANSLATE BUTTON. PPPs, development financing in Lusophone Countries Autora: Mariana ABRANTES de Sousa
Tradutor
sexta-feira, julho 15, 2011
Subscrever:
Enviar feedback (Atom)
All’s not that clear!
ResponderEliminarIn the May 27, 2001 IMD Market Highlights produced by the Investment Management Department of the World Bank Treasury, we read “It has been reported that Greeks already hold EUR 250bn in Swiss banking accounts and that the private-wealth capital outflow from the country is ongoing”
Now let us suppose all that money held by the Greeks has been invested in German Bunds and then, if we compare that to Greece’s total public debt of EUR 372bn and value the positions at current market prices, what nation would come up on top?
It reminds me so much of when my banker friends complained in the early eighties about the Venezuelan public debt default, and to which I always answered them “this is entirely your own fault since you know very well we would never lend to our government, especially at those low rates”
Greece, go and post a complaint with your bank regulators, arguing “we citizens would never have dreamt of allowing banks to leverage 60 times or more when lending to Greece… or to Germany for that matter”.
As I see it Basel regulations have turned into the largest pushers of sovereign debt ever… come to think of it, could they have outsourced the drafting of their regulations to Fidel Castro in Cuba?