Europe’s debt crisis Again?
Crisis AwaitsAgain? Anymore does what constitutes bad news? We have been looking at the European debt consideration very closely over the last 12 months. Our concern has been a domino like effect through the PIGS..( For those who have followed the blog) Infecting the larger more stable economies- Like Germany or France. Could the Refi needs of Europe business community become the same contagion of the Refi needs of American homeowner in 2010?
From the New York times. http://www.nytimes.com/2010/07/12/business/global/12refinance.html
FRANKFURT — The sovereign debt crisis would seem to create worry enough for European banks, but there is another gathering threat that has not garnered as much notice: the trillions of dollars in short-term borrowing that institutions around the world must repay or roll over in the next two years. The European Central Bank, the Bank of England and the International Monetary Fund have all recently warned of a looming crunch, especially in Europe, where banks have enough trouble raising money as it is. Their concern is that banks hungry for refinancing will compete with governments — which also must roll over huge sums — for the bond market’s favor. As a result, credit for business and consumers could become more costly and scarce, with unpleasant consequences for economic growth. “There is a cliff we are racing toward — it’s huge,” said Richard Barwell, an economist at Royal Bank of Scotland and formerly a senior economist at the Bank of England, Britain’s central bank. “No one seems to be talking about it that much.” But, he added, “it’s of first-order importance for lending and output.”