Dear SAP Banking community members.
Mr. David Cameron, United Kingdom Prime Minister, made yesterday some interesting comments, talking about the financial crisis in Europe; he warned that the Eurozone debt crisis is not “anywhere near halfway" to being resolved, and blamed it for Britain's double-dip recession.
http://www.independent.co.uk/news/uk/politics/eurozone-crisis-has-a-long-way-to-go-warns-cameron-7689150.html
I cannot agree more with the first part of the statement and I cannot disagree more with the second part.
Why I think we’re still far from the end of the crisis? Simply, because the exit strategy of this crisis will be efficient management of capital and liquidity, and the process has not started yet.
Some comments in the news on the last days;
According to the economist Spanish banks could require €60 billion-80 billion to restore confidence
http://www.economist.com/node/21553499
But if the real estate bubble in Spain has been financed indirectly by foreign (mainly German) banks, what’s the solvency of German banks holding debt of Spanish banks with solvency issues?
It’s absolutely impossible talking properly about Capital management if we don’t know the real value of the assets in the Financial System balances; till that happens we will not start to walk towards recovery
Why I don’t agree with the second part of Mr. Cameron’s statement?
Mr. Cameron also said struggling economies across the Channel, which receive 40 per cent of all UK exports, were harming Britain's prosperity.
Correct, but he also should remember that exporting to those countries was the basis of past UK’s prosperity. If those countries hadn’t wasted solvency the way they did UK’s exports would have been much smaller.
We’re in a global economy, and what a country does affects the others, in UK and in Australia.
Asked why the US was growing after implementing a less strict austerity policy than the UK, Mr. Cameron said: "They don't have the Eurozone on their doorstep, and we've seen in the last couple of weeks Spain going into recession, Holland going into recession, Italy going into recession."
Sorry Mr. Cameron but you’re wrong, US is growing because in spite of his huge debt and deficit the rest of the world is still financing the country http://www.usdebtclock.org/
Is this sustainable? Of course not, sooner than later US bonds spreads will rise and the US will have to implement severe austerity programs bringing the country into recession. When that happens, will Mr. Cameron blame the Eurozone? Probably not.
Looking forward to read your comments.
Kindest Regards.
Ferran.
Mr. David Cameron, United Kingdom Prime Minister, made yesterday some interesting comments, talking about the financial crisis in Europe; he warned that the Eurozone debt crisis is not “anywhere near halfway" to being resolved, and blamed it for Britain's double-dip recession.
http://www.independent.co.uk/news/uk/politics/eurozone-crisis-has-a-long-way-to-go-warns-cameron-7689150.html
I cannot agree more with the first part of the statement and I cannot disagree more with the second part.
Why I think we’re still far from the end of the crisis? Simply, because the exit strategy of this crisis will be efficient management of capital and liquidity, and the process has not started yet.
Some comments in the news on the last days;
According to the economist Spanish banks could require €60 billion-80 billion to restore confidence
http://www.economist.com/node/21553499
But if the real estate bubble in Spain has been financed indirectly by foreign (mainly German) banks, what’s the solvency of German banks holding debt of Spanish banks with solvency issues?
It’s absolutely impossible talking properly about Capital management if we don’t know the real value of the assets in the Financial System balances; till that happens we will not start to walk towards recovery
Why I don’t agree with the second part of Mr. Cameron’s statement?
Mr. Cameron also said struggling economies across the Channel, which receive 40 per cent of all UK exports, were harming Britain's prosperity.
Correct, but he also should remember that exporting to those countries was the basis of past UK’s prosperity. If those countries hadn’t wasted solvency the way they did UK’s exports would have been much smaller.
We’re in a global economy, and what a country does affects the others, in UK and in Australia.
Asked why the US was growing after implementing a less strict austerity policy than the UK, Mr. Cameron said: "They don't have the Eurozone on their doorstep, and we've seen in the last couple of weeks Spain going into recession, Holland going into recession, Italy going into recession."
Sorry Mr. Cameron but you’re wrong, US is growing because in spite of his huge debt and deficit the rest of the world is still financing the country http://www.usdebtclock.org/
Is this sustainable? Of course not, sooner than later US bonds spreads will rise and the US will have to implement severe austerity programs bringing the country into recession. When that happens, will Mr. Cameron blame the Eurozone? Probably not.
Looking forward to read your comments.
Kindest Regards.
Ferran.
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