My thought process this morning from reading http://bit.ly/696MmZ, not like I’m not already aware but to see it in print (repeatedly) is getting me a bit down.
“Rising unemployment, lower incomes and corporate defaults are likely to lead to a further increase in loan delinquencies and a further deterioration of bank loan portfolios,” said the ECB concerning CEE.
“Potential capital outflows triggered by, for example, a possible renewed increase in risk aversion towards the region could result in severe loan losses, eroding the capital and asset quality of parent banks and their subsidiaries,” it said.
Or dividend payments to support parent groups? No one blink. Too much to ask ?
Euro zone banks own most of the banking sector in eastern Europe, with UniCredit , Raiffeisen International, Erste Group Bank , Societe Generale and KBC being the biggest players by assets.
The ECB warned, without identifying the banks it was alluding to, that some of them may be prone to cluster risks which could emerge if bad debt was to rise again.
Haven’t we already concluded that bad debt will rise? Imagine if banks had their books and loss recognition practices properly audited to boot?
It said that risks included the “possible unearthing of portfolio concentration risks and insufficient differentiation across sectors, currencies and geographical entities.”
Those factors all played a role in the bailout of Austrian bank Hypo Group Alpe Adria, which was nationalised on Monday after German owner BayernLB walked away. Hypo is very exposed to the real estate and leasing business in Croatia and other former Yugoslav countries and is one of the major banks there.
Real Estate and leasing, huh? Shit.
With this in mind, I am off on holiday. A bit heavy, yes. This season I for one am going to focus on family and take a break from what has been a crazy year. Next won’t be a hell of a lot better. But this isn’t the time to worry about that. Best to you and yours!
Me: “Well, the premise of the movie is based on a theoretical ethics question - if somebody offered you a million dollars to press a button in a box that would instantly kill a random person on the planet, would you do it?”
Lawyer: “Huh. Interesting question. Is there a limit to how many times you can push the button?”