The following is an extract from today's Daily Telegraph (though, rather
strangely, not yet on the website). Needless to say, American banks are
deeply involved in Europe and would be directly affected by any crisis over
here.
Keith
----------
HOLD ON TIGHT FOR THE NEXT CREDIT CRUNCH
The West stands on the verge of a new banking crisis, writes Harry Wilson
Comparisons to the weekend of September 13-14 2008 have been made
frequently in the two years since the US investment bank Lehman Brothers
was allowed to go bust. They were made again yesterday before Ireland
agreed last night's £72 billion bail-out. But despite hopes that this will
be the beginning of the end of Europe's financial crisis, many think that
there are many more jittery weekends to come.
As European finance ministers met in Brussels yesterday, analysts and
investors looked on nervously.
Only hours before teh deal was agreed, one banker intimately involved in
advising EU governments summed up the mood.
"This is the next credit crunch," he said. "The markets feel very nervous
at the moment and I think the sell-off we began to see last week could turn
into a fullscale rout this week if the EU doesn't get a grip of the issue."
After seeing the details of the Ireland deal he was a touch happier. But he
warned that the danger was far from over. That's because if Ireland proved
anything it proved this: while its problems were characterised as a
sovereign debt crisis, it was in many ways more of a banking crisis.
-------
Keith Hudson, Saltford, England
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