Rolf Englund IntCom internetional
Förlorar banken en miljard måste den kräva låntagarna på 10–20 miljarder
En bank får låna ut 10–20 gånger sitt egna kapital.
Finanskrisen är värst i USA och Storbritannien där statsfinanserna är usla och hushållen skuldsatta över öronen. Brown, Sarkozy och Obama vill lösa problemen genom att vräka ut pengar och öka budgetunderskotten. Men fru Merkel och hennes finansminister Steinbrück ställer inte upp på keynesiansk expansion och jämförs nu med regeringen Brüning som banade väg för Hitler.
Fru Merkel har en åsiktsfrände i Anders Borg. Han kommer liksom Göran Persson från Katrineholm och vill inte förslösa arvet efter denne, nämligen starka statsfinanser.
If you have a pension pot of £100,000 and 10 per cent of it is invested in Greek government bonds,
Banker bör givetvis inte plancera sina, och spararnas, pengar i statsobligationer.
How to Escape Basel III Doom Loop
Two /IMF/ officials said one estimate showed that marking sovereign bonds to market
In a guest article, Alan Greenspan says banks will need much thicker capital cushions than they had before the bust
A drop in the value of assets of 2 per cent wipes out 40 per cent of the capital of an organisation such as a bank that is only 5 per cent owned by its shareholders.
Unfortunately, last year the wholesale money markets closed up for a wide variety of reasons, of which the most important was the fall in American house prices and the implications of that fall for the value of the structured finance securities. Triple-A securities dropped in value, often by 10 to 20 per cent. If such securities were, say, 10 per cent of high street bank assets then they had lost 1 or 2 per cent of the value of all their assets.
That sounds trifling, hardly enough to threaten the banks' charitable donations let alone the future of capitalism. But here comes the vicious arithmetic. A drop in the value of assets of 2 per cent wipes out 40 per cent of the capital of an organisation such as a bank that is only 5 per cent owned by its shareholders. According to rules developed by international financial bureaucrats in Basle over the past 20 years, a bank that has lost a big chunk of its capital must - at least theoretically - shrink its assets to restore the sacred capital-to-assets ratio to its original level.
A ghastly downward spiral, called "debt deflation", can now engulf the system. The banks can shrink their assets by selling off securities or forcing their customers to repay loans. But sales of securities aggravate the fall in their price, and forcing customers to repay loans is even more gruesome. As loan portfolios decline, so does the level of bank deposits. Bank deposits are the principal form of money in today's world. If the quantity of money goes down, so do asset prices, incomes and spending.
None of the above, despite its overwhelming significance for employment and living standards, is rocket science. Ben Bernanke, the Chairman of the Federal Reserve, has written extensively about the Great Depression of the 1930s, the worst example so far of debt deflation.
The downward spiral is caused by a logjam that prevents market agents from pricing assets correctly. The textbook answer is well known and was applied by the Bank of England on many occasions in the 19th and 20th centuries. The central bank, assisted by the Government, must move into the markets and buy up every decent security in sight. Instead of the triple-A securities trading at 80 or 85 cents, heavy official purchases could raise the price to 90 or 95 cents. The banks can start to write back their capital and to lend again, ending the crisis.