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Democorruptcy

Eu Banks Have Credit Losses Of £367 Bln

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BRUSSELS (Reuters) - Twenty-two large banks in Europe may have accumulated credit losses of close to 400 billion euros (367 billion pounds) for this year and next, the International Herald Tribune reported on Saturday.

The newspaper quoted officials who have seen a stress test commissioned by EU finance ministers from the Committee of European Bank Supervisors (CEBS) earlier this year.

Results of the tests will be discussed by the ministers at an informal meeting in Gothenburg in Sweden on Thursday.

The stress test showed the European Union banking sector could withstand a further deterioration of economic conditions, three EU sources told Reuters on Friday.

The stress tests were conducted by national supervisors according to common guidelines and methodology issued by the CEBS. It does not show the condition of individual institutions, but rather the degree of resilience of the overall EU banking sector.

http://uk.reuters.com/article/idUKTRE58P0ZA20090926

Is that all? What a relief, thought it would be far worse than that. Not only that but the banks can withstand further deterioration in the unlikely event of that happening.

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The actual issue is where are the losses. It is widely accepted that the French banks are ok, BNP has recently been paying back government money. There is debate over the Spanish banks because of the property crash in Spain but also the Spanish govt insisted that the Spanish banks kept higher capital reserves in an effort to curb property prices, so they may be ok or better than thier counterparts.

The only other countries that have large banks are Italy, Germany and Austria. So Iwould say that we will be seeing more bank bailouts in those three countris in the future.

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Spanish banks kept higher capital reserves in an effort to curb property prices

er, is that right ?

not the bit about higher capital reserves, but that it was intented to or indeed actually did curb pwoperty pwices ?

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er, is that right ?

not the bit about higher capital reserves, but that it was intented to or indeed actually did curb pwoperty pwices ?

No, the stricter regime was brought in as a result of the Banesto bank collapse in the early 90s. In fact as late as 2007 Spanish banks were reported as begging the government to relax the strict regime, as they felt they couldn't compete on an equal basis with the de-regulated banks of the UK and US.

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banks throughout the World can withstand a total collapse in asset values..even if houses were free, they'd value them at model prices.

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The actual issue is where are the losses. It is widely accepted that the French banks are ok, BNP has recently been paying back government money.

Yeah, um, I'm not sure you understand how this works.

BNP may have cash handy but they could still be bankrupt, it all depends on if they are correctly valueing their assets.

They may have €200bn liabilities and €20bn cash and €200bn assets, but if the assets are really only worth €100bn and you pretended they haven't fallen in value, they can pay the government €10bn or even €bn.... they are still insolvent.

This whole thing started because no-one would admit their assets are worth less that they used to be.

It is highly unlikely that ANY bank is OK, since they were all buying the same sort of assets, and none of them had a huge surplas of cash big enough to absorbe significant losses.

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No, the stricter regime was brought in as a result of the Banesto bank collapse in the early 90s. In fact as late as 2007 Spanish banks were reported as begging the government to relax the strict regime, as they felt they couldn't compete on an equal basis with the de-regulated banks of the UK and US.

yet they still had/have a house price bubble. :blink:

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