Tuesday, October 5, 2010

Oh Dear

Banks' $4 trillion debts are 'Achilles’ heel of the economic recovery', warns IMF

Lenders across Europe and the US are facing a $4 trillion refinancing hurdle in the coming 24 months and many still need to recapitalise, the Washington-based organisation said in its Global Financial Stability Report. Governments will have to inject fresh equity into banks – particularly in Spain, Germany and the US – as well as prop up their funding structures by extending emergency support. Although banks have recognised all but $550bn of the $2.2 trillion of bad debts the IMF estimates needed to be written off between 2007 and 2010, they are still facing a looming funding shock that will need state support

Posted by cat and canary @ 04:59 PM (3006 views)
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11 thoughts on “Oh Dear

  • Not really sure why anyone thinks this is news. After the Lloyds and RBS results, it was obvious that neither of them had a cat in hell’s chance of repaying the money they owe….to you and me, of course.
    The banks continue to take the mickey – like the world at the moment, they’re deranged. But for sheer chutzpah and injustice, you still can’t beat the States….

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  • mark wadsworth says:

    Tee hee. And no doubt governments will fall for it again and bail them out again and hike taxes again, and so on. I can’t see this ending well for Timmy Taxpayer.

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  • My DEFAULT sign is at the ready, for an auspicious occasion.

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  • This might well get in the way of Flash’s miracle economic recovery.

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  • “Governments will have to inject fresh equity into banks”

    And if they refuse?

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  • the number cruncher says:

    I wonder if Gideon and Vince can resist the call of the banks. I would love to be a fly on the wall of their meetings.

    I heard Redwood on the radio earlier this week spouting off that lowering capital requirements was the only sensible policy if we where to avoid a double dip and even more bank bailouts. Hmm sounds like he has enjoyed a few good dinners from some banking friends.

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  • I DONT WANT TO WAIT 24 MONTHS – I WANT A DAMN HOME NOW!!

    sorry for shouting, it’s just that I have 2 small screaming kids and the desire to buy a decent place to house them.

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  • Be grateful you have 2 screaming kids…and not 2 starving.

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  • slartibartfast says:

    How long can this farce continue.

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  • mark wadsworth says:

    I think “Achilles’ Heel” is possibly the wrong expression. “Concrete shoes” would be more accurate.

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  • The numbers don’t add up, we are being played for prize plonkers, all of us, asked to save a billion here and a billion there and then the next day being prepared for another bank bailout of potentially hundreds of billions. So in what sense does money actually exist ? Will the government simply create another IOU for £200 billion for the banks to be paid off over the next 70 years, what about the deficit? Again this doesn’t add up at all.

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