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Eurozone Debt Crisis Poses Biggest Threat To Uk Stability

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http://www.telegraph.co.uk/finance/economics/8596245/Eurozone-debt-crisis-poses-biggest-threat-to-UK-stability.html

The eurozone debt crisis poses the "most material and immediate threat" to the UK's financial stability, according to a report by Sir Mervyn King's Financial Policy Committee.

"Sovereign and banking strains are the most material and immediate threat," the committee, chaired by the Bank of England governor, said in its inaugural report.

The committee called for banks to improve their disclosure of sovereign and bank sector exposure and also warned that authorities needed to keep a closer eye on the explosion of "opaque" products such as exchange traded funds (ETFs), which banks increasingly use to raise funds.

It follows an overnight victory for David Cameron in preventing British taxpayers' money being used to bail out Greece.

......

Speaking at a news conference hours later, Sir Mervyn King said uncertaintainty over exposure to countries such as Greece could lead to a "crisis of confidence", which posed a bigger risk than direct exposure.

"There is always uncertainty about the scale of exposures, which counter-parties out there are the ones which are heavily exposed," he said.

"That uncertainty can lead at various points for funders of banks...to draw back and there can be a crisis of confidence in sentiment in which people say 'I simply don't understand the complexity of the interconnectedness of these exposures and I just won't take the risk of lending'. And that is the bigger risk, I think."

Mr King also said that the ongoing crisis in Greece was not a matter of liquidity, but solvency, and a build-up of large amounts of debt:

"Right through this crisis...an awful lot of people wanted to believe that this was a crisis of liquidity. It wasn't, it isn't. And until we accept that we will never find an answer to it. It was a crisis based on solvency or to be more precise, the build up of very large amounts of debt where concerns crept in on the ability of the borrowers to repay that debt," he said.

Benny Hill Crisis of Solvency

Strange and yet everyone to solve a solvency crisis through more debt at the problem and somehow they are shocked that it hasn't gone away.

Still at least Benny Hill has got a knighthood.

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http://www.telegraph.co.uk/finance/economics/8596245/Eurozone-debt-crisis-poses-biggest-threat-to-UK-stability.html

Benny Hill Crisis of Solvency

Strange and yet everyone to solve a solvency crisis through more debt at the problem and somehow they are shocked that it hasn't gone away.

Still at least Benny Hill has got a knighthood.

Well he has given his warning. It is one of those quietly spoken ones, that mean the situation is very serious indeed. I dont know why he was talking about banks declaring their exposure to all of this bad debt, they will never do that.

Did anyone see that fool on Newsnight last night who was advocating more debt as the solution to the Greek crisis?

The only way out from here is default. There is no more can kicking, it is over.

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(...)

Strange and yet everyone to solve a solvency crisis through more debt at the problem and somehow they are shocked that it hasn't gone away.

Still at least Benny Hill has got a knighthood.

Mervyn doesn't want more debt - he wants more capital:

http://www.bbc.co.uk...siness-13901685

The Bank's governor Sir Mervyn King said the debt problems of Greece and other countries posed "the most serious and immediate risk" to UK banks.

The FPC also called for banks to divert their profits towards building up their reserves against future losses.

It would mean the banks paying out less in dividends or bonuses.

UK lenders need to build up their capital buffers as part of the Basel III international agreement, which was designed to ensure that all banks worldwide are better able to withstand another financial crisis.

Sir Mervyn said that by paying out less of their profits to shareholders and employees, the banks could rebuild their capital without having to cut back on lending.

In the conclusions of its first meeting the committee asked the soon-to-be-replaced Financial Services Authority (FSA) to ensure that the banks it supervises comply with the recommendation.

To be fair, it is hardly rocket science.

If the problem is too much debt relative to capital: You need more capital.

Edited by Timm

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I don't recall the FSA saying it was a solvency crisis.

Just as well we don't have Spanish banks operating on UK high st. taking UK deposits. That would be a potential disaster.

The Bank's governor Sir Mervyn King said the debt problems of Greece and other countries posed "the most serious and immediate risk" to UK banks.
Edited by Red Karma

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The EU is getting the dream team in charge.

The European Systemic Risk Board (ESRB) is an independent EU body responsible for the macro-prudential oversight of the financial system within the Union.

The Chair of the ESRB is the President of the European Central Bank, Mr Jean-Claude Trichet. The first Vice-Chair of the ESRB is Sir Mervyn King.

http://www.bankofengland.co.uk/financialstability/esrb.htm

It was announced today that Mario Draghi is taking over from Trichet as the President of the ECB so presumably he joins the ESRB as well.

EU Leaders Appoint Mario Draghi to Head ECB; Draghi Was Head of Goldman’s Derivatives Group When Bank Advised Greece On Hiding Debt

http://maxkeiser.com/2011/06/24/eu-leaders-appoint-mario-draghi-to-head-ecb-draghi-was-head-of-goldmans-derivatives-desk-at-time-of-greek-swaps/

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The western world started in Greece and the end will start in Greece.

Tragic really.

They will default....however it is wrapped up; they WILL default.

So will Ireland and Portugal, quickly followed by the rest.

The Euro will end.

Then the shift of power will gather speed.

We are quickly approaching one of history's CTL+ALT+DEL moments.

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The eurozone debt crisis poses the "most material and immediate threat" to the UK's financial stability, according to a report by Sir Mervyn King's Financial Policy Committee.

"Sovereign and banking strains are the most material and immediate threat," the committee, chaired by the Bank of England governor, said in its inaugural report.

...

Speaking at a news conference hours later, Sir Mervyn King said uncertaintainty over exposure to countries such as Greece could lead to a "crisis of confidence", which posed a bigger risk than direct exposure

That along with the UK's out of control inflation.

As for the confidence that's shot to pieces along with the credibility.

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Greece and others being a net importers have been of great benefit to the net exporters.....it's a-ok whilst being used and until you become a problem......all this has been brewing for years, no restraints were put in place for obvious beneficial reasons by the vested interested parties on both sides.....throwing more debt at the problems will not solve them it will only exasperate them......can't pay won't pay. ;)

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The EU is getting the dream team in charge.

The European Systemic Risk Board (ESRB) is an independent EU body responsible for the macro-prudential oversight of the financial system within the Union.

The Chair of the ESRB is the President of the European Central Bank, Mr Jean-Claude Trichet. The first Vice-Chair of the ESRB is Sir Mervyn King.

http://www.bankofeng...bility/esrb.htm

It was announced today that Mario Draghi is taking over from Trichet as the President of the ECB so presumably he joins the ESRB as well.

Little chance of Goldman Sachs role in this sorry saga coming out in the open then? mad.gif

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akqC4y5U7MnU

Goldman Sachs, Wall Street’s most profitable securities firm, is being criticized by European politicians including Germany’s ruling Christian Democrats, who have questioned whether the firm helped Greece hide its deficit to comply with the currency’s membership criteria. Greece is also being faulted by fellow euro-region countries for failing to disclose the swaps to EU regulators.

Guarantee wherever there is a serious problem, this firm is involved somewhere.

Edited by John Steed

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"There is always uncertainty about the scale of exposures, which counter-parties out there are the ones which are heavily exposed," he said.

"That uncertainty can lead at various points for funders of banks...to draw back and there can be a crisis of confidence in sentiment in which people say 'I simply don't understand the complexity of the interconnectedness of these exposures and I just won't take the risk of lending'. And that is the bigger risk, I think."

So it's similar to the banking crash only sovereign and likely it's going to be far worse because they were in full denial right upto the start of the banking crash but this time they already know they can't get away with denying it all.

It's at the Crossroads and Benny is in control now.

http://images.icnetwork.co.uk/upl/birmmail/aug2008/1/6/D550C5A9-E421-9F03-5D0AC522A1788A29.jpg

http://images.icnetwork.co.uk/upl/birmmail/mar2008/6/7/8AAACD4B-EACE-8CFA-30B3154725258DC4.jpg

http://thm-a04.yimg.com/nimage/c796f4722b2b73ea

Edited by billybong

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http://www.telegraph.co.uk/finance/economics/8596245/Eurozone-debt-crisis-poses-biggest-threat-to-UK-stability.html

Benny Hill Crisis of Solvency

Strange and yet everyone to solve a solvency crisis through more debt at the problem and somehow they are shocked that it hasn't gone away.

Still at least Benny Hill has got a knighthood.

Mervyn is preparing his "it started in America Greece"... "Not our fault, you understand"...

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Good point.

Benny is in control of being out of control.

(No offence to the real Bennys ;) )

....who is holding the debt?....nobody knows. ;)

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....who is holding the debt?....nobody knows. ;)

reckless savers/pensioners are holding the debt, they just arent willing to accept it yet, the same as the reckless and irresponsible borrowers

Edited by georgia o'keeffe

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reckless savers/pensioners are holding the debt, they just arent willing to accept it yet, the same as the reckless and irresponsible borrowers

There will be no winners..... when it all comes out in the wash.....they were all naked. ;)

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'Eurozone Debt Crisis Poses Biggest Threat To Uk Stability'

Doesn't the UK have a bit of a debt crisis? Pot calling kettle black. Like others, I can hear the 'started in Greece' meme.

I'm sure Merve will be OK.

It is amazing that those in situ as the crisis built, as they facilitated it, who never saw it coming, are still in their jobs, continuing to wax lyrical about what should be done.

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More like, :angry: your failure to control inflation is the biggest threat to the UK economy you tit Sir Merv!!!!!!!!!!!!!!!!!!!!!!!!

Have some respect! ;)

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'Eurozone Debt Crisis Poses Biggest Threat To Uk Stability'

Doesn't the UK have a bit of a debt crisis? Pot calling kettle black. Like others, I can hear the 'started in Greece' meme.

I'm sure Merve will be OK.

It is amazing that those in situ as the crisis built, as they facilitated it, who never saw it coming, are still in their jobs, continuing to wax lyrical about what should be done.

....there will be the few that have reserved their place and paid their deposit in the lifeboat. ;)

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More like, :angry: your failure to control inflation is the biggest threat to the UK economy you tit Merv!!!!!!!!!!!!!!!!!!!!!!!!

It's only wage inflation that's the problem, anything else doesn't matter.

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....there will be the few that have reserved their place and paid their deposit in the lifeboat. ;)

And those who have sold the place in the lifeboat, have taken payment and scarpered.

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  • 312 Brexit, House prices and Summer 2020

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