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EU: Bank collapse
  • Vitaliy_KiselevVitaliy_Kiselev
    Josef Ackermann just gave a terrifying speech about the fragility of the Euro banking sector right now.

    At a conference in Frankfurt he said, "It is an open secret that numerous European banks would not survive having to revalue sovereign debt held on the banking book at market levels."

    We have translated the speech based on Handelsbatt's, the organizer of the event where Ackermann spoke, account of it.

    "In recent weeks, the distrust of the financial markets has spread to the banks because they are now suffering from the debt crisis in Europe and have a lot of exposure to, for example, Greek bonds."

    "Since the financial crisis, some European banks have lost a third or more of their market capitalization," he said, according to Google Translate.

    "Most institutions have a rating of "below the book value or at best."

    There are three major stress factors crushing Euro banks right now, he says: the debt crisis, structural factors and financial regulation. With them together, it will be hard for the European banks to increase their revenues.

    The implication is that not just Eurozone countries are buckling under the pressure of Greece's, France's, and Italy's debts, but banks are too. It sounds like a desperate call for a bailout. Now.

    However he says, "State funds could use means to put stability back into many companies and countries, but that does not remain the only solution."

    Still, the situation he describes looks dire. He says, "Many countries and households would have to reduce their debt. The mortgage business and consumer loans were [the few things] driving growth. In addition, there's the problem of shrinking populations in several European countries, which negatively affects the growth of credit markets."

    Read more: http://www.businessinsider.com/josef-ackermann-euro-banks-speech-frankfurt-2011-9
  • 3 Replies sorted by
  • nomadnomad
    When communism collapsed, the collapse of capitalism became inevitable – just a question of time.

    The two adversaries were stabilizing each other without knowing…

    Ackermann was the one who announced a profit rate for his bank far beyond economic growth shortly after the end of the 2009 crisis – greed eats brain.
  • Vitaliy_KiselevVitaliy_Kiselev
    >When communism collapsed, the collapse of capitalism became inevitable – just a question of time.

    Quite the contrary.
    Capitalism gained some time by taking USSR area markets.
    If it won't be mr. Gorbachev and his friends, current problems in capitalist countries will become clear to public in early 90s and current picture had been exactly reverse.
  • danyyyeldanyyyel
    Its terrible, in 2008 during the last bank crisis, those bank were bail out by tax payers money. There were all sort of pledge of never again the excess that brought those bank down, etc. etc. . The French mostly tried to use that bail out money to put a control of those banks but the more anglo saxon side American/english did against that. In the end we gave money back to those same people that skewed the system before. When they got out (supposedly) those ass-hole bankers came out triumphant and their arrogance was disgusting. The dividend and excess where at record high and they are again bringing the system down.

    There were proposal by the french (I am a francophone but not french) of having a system where you would have what would be called normal bank and gambling ones. So you knew where you are putting your money. How many livelihood of people that have work all their lives will disappear in an instant because of some traders and bankers greed. Some of these bank should be called Casinos rather than banks and the responsible people should be arrested and prosecuted.

    Barrak will loose the next election and it is his fault. He had the opportunity to put some order in the system 3 years ago, put he did not. Now it is going to bite him in his ass. Oh god, back to the old days of the Neo republican now it will be tea party. So when the next war so that they can fill the pocket of the Arm and oil industry friends. Just use the sense of patriotism to send some poor young guys to death so as to fill the coffers of their friends. The rest of us world-wild will have to endure those insecure and trouble time as during the bush administration.
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