Monday, Jun 18, 2007
Debt Correction
Channel4 News: The effect of lending
One of Britain's leading economists is increasingly concerned by the way banks sell on billions of pounds of corporate debt to private investors, including hedge funds. Professor Willem Boyter told Channel Four News that the system was facing a correction that would be "ugly" (follow video link).
Posted by pendulum @ 10:27 PM (160 views) Add Comment
2 Comments
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1. Orwell said...
This is a good article.
JK Galbraith was talking about this before his death and he lived through the 1920's and 1930's slump/s.
Shame we couldn't get his comments on this article. He was very concerned about he pyramid selling of debt and the fact that it was all disappearing into a black hole.
2. royston said...
Dead right, too!
BTW, its Professor William BUITER (not BOYTER).
The US & European banking systems have evolved in such a way that they are much less regulated than they used to be. That in itself is worrying. Ask yourself why did banking regulation arise in the first place? Because, left to their own devices, banks manipulate the system to the detriment of their customers. By and large, regulators have done a good job of keeping them in check. Large scale bank rip-offs are a distant memory. We have all become complacent. Banks have managed to wriggle out from under the watchful gaze of the regulator. There is no prize for guessing what will happen next - it's just too obvious!