Skip to comments.Citigroup warns of fresh wave of bank failures in Europe
Posted on 12/21/2010 3:08:23 PM PST by bruinbirdman
Citigroup has warned of a fresh wave of bank failures and sovereign defaults in Europe unless EU leaders come up with a credible response to the crisis.
Prof Willem Buiter, the bank's chief economist, said the eurozone was paralysed by a "game of chicken" between the European Central Bank and EMU governments.
Both sides are trying to shift responsibility on to the other for shoring up southern Europe and Ireland, raising the risk of contagion spreading. "The market is not going to wait until March for the EU authorities to get their act together. We could have several sovereign states and banks going under. They are being far too casual," he said.
Mark Schofield, Citigroup's credit chief, said Portugal would need an EU rescue soon and that it was "highly likely that Spain will go the same way". This risks overpowering the 440bn (£373bn) bail-out fund.
"Restructuring of some sovereign debt is inevitable. There is a chance that Spain could still make it, but the debt trajectory looks unsustainable if a broader EU-wide solution isn't found," he said.
The warnings came after Moody's said it might downgrade Portugal's A1 rating by one or two notches on growth worries, but said the countrys solvency was not in question.
Meanwhile, Fitch Ratings has placed Greece's "BBB-" long-term foreign and local currency Issuer Default Ratings on Rating Watch Negative. . . .
(Excerpt) Read more at telegraph.co.uk ...
There is no end to it.
Citigroups largest shareholder? Also Fox News/NewsCorp’s largest shareholder - Prince Al Waleed. Citicorp bailed out at the tune of $380 billion - yes that much.
Not to worry the Fed just pledged YOU as collateral for the foreign banks!!!!
Fed throws euro banks a lifeline
For an outfit whose policies supposedly are plunging the world into unspeakable conflict, the Federal Reserve is doing an awful lot to avoid another meltdown.
The Fed said Tuesday it would extend the dollar swap lines it provides to central banks in Europe, Japan and Canada in a bid to avoid a cash crunch like the ones seen to such devastating effect in 2008.
Your dollars, our problem?
The swap lines, under which the Fed provides foreign central bankers with essentially unlimited stocks of dollars in exchange for the equivalent amount of the counterpart’s currency, are intended to help head off a banking crisis like the one that appears to be developing in the European Union.
The European Central Bank said Tuesday that money market conditions are deteriorating, raising fears that rising government bond yields and undercapitalized banks will start feeding off one another in a sort of euro doom loop.
Investors have spent recent months backing away from the debt issued by weaker countries such as Spain and Portugal amid questions about their finances and the strength of their banks, which have been impaired by steep declines in property prices.
The financial temblors of the past two months have made it clear that, for all the talk at the beginning of 2010 about the Fed and other government bodies executing their supposed exit strategies and leaving financial markets to their own devices, we are still probably years away from a world in which your taxpayer dollars won’t be propping up the misguided ambitions of bankers everywhere.
I still have some money in my savings I can give them....
Crashing a bank is the new $ bubble.
Pay ‘em in zimbabwe dollars!
It's not your money, it's the government's money. You just have temporary use of it until Obama decides he needs it back.
Forgive me...Obama is a swell guy.../s
Face it the banks aren’t gangsters, they are terrorists.
“Face it the banks arent gangsters, they are terrorists.”
Could it be the reason that promiissory are “lost “ is because they were sold multiple times?
‘Failure’ is AEP’s mantra. I’ll take it with a hefty grain of salt.
According to AEP, the End Of The World occured years ago.... What street corner does he hang out on these days?
We saw this when Lehmans collapsed.
This circumvents the Forex, eh?
Essentially, the Fed forcasts a run/collapse on euros and flight to the greenback?