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    $3.6T "wall" IMF

    Banks face $3.6T "wall" of maturing debt: IMF
    Reuters
    9:42 AM, E.T. | April 13, 2011
    Financials
    The world's banks face a $3.6 trillion US "wall of maturing debt" in the next two years and must compete with debt-laden governments to secure financing, the IMF warned Wednesday.

    Many European banks need bigger capital cushions to restore market confidence and assure they can borrow, and some weak players will need to be closed, the International Monetary Fund said in its Global Financial Stability Report.

    The debt rollover requirements are most acute for Irish and German banks, with as much as half of their outstanding debt coming due over the next two years, the fund said.

    "These bank funding needs coincide with higher sovereign refinancing requirements, heightening competition for scarce funding resources," the IMF said.

    Overall, the IMF said global financial stability has improved over the past six months. The most pressing challenges in the coming months will be funding of banks and sovereigns, particularly in vulnerable euro area countries, it said.

    The IMF and European Union bailed out Greece and Ireland, and are in talks with Portugal on a lending program as sovereign borrowing costs surge.

    Many investors have questioned whether Spain can avoid a similar fate, but the IMF said Spanish authorities were taking the right steps to address the country's debt problems.

    "The actions that have been taken in Spain recently have managed to decouple, in the views of markets, the fortunes of Spain relative to those of Portugal" and Ireland, said Jose Vinals, director of the IMF's Monetary and Capital Markets Department.

    European banks hold large amounts of euro zone sovereign debt, making them vulnerable to losses if countries are forced to restructure. Vinals said lending programs in Greece and Ireland were built on the assumption there would be no such restructuring, and the programs needed time to work.

    Still, worries about bad debt exposure have heightened investor concerns about bank balance sheets, making it even more important for firms to shore up their capital.

    U.S. banks built up capital buffers in 2009, when regulators completed a set of stress tests that revealed some large holes. But European banks still need to raise a "significant amount of capital" to regain access to funding markets, the fund said.

    "It is ... imperative that weak banks raise capital to avoid a pernicious cycle of deleveraging, weak credit growth, and falling asset prices," it warned.

    LIVING DANGEROUSLY

    The European Central Bank's upcoming stress tests provide a "golden opportunity" to improve bank balance sheet transparency and reduce market uncertainty about the quality of assets on banks' books, the IMF said.

    European banks won't be able to obtain all the necessary capital from markets, and public money may have to fill some of the gaps, it added. Banks could also cut dividends and retain a larger portion of earnings.

    "Overall, a comprehensive set of policies -- including capital-raising, restructuring and where necessary resolution of weak banks, and increased transparency about banking risks—is needed to solve banking system vulnerabilities," it said. "Without these reforms, downside risks will re-emerge."

    The IMF said banks' exposure to troubled sovereign debt is "uncertain," which adds to the funding strains.

    It said government debt was generally high and on a worrying upward path in many advanced economies. It repeated its warning that the United States and Japan faced particularly dangerous debt dynamics.

    Advanced economies were "living dangerously" with high debt burdens, and faced the difficult task of trying to pare deficits without choking off the economic recovery.

    The fund said government interest bills would likely rise, although the burden should generally remain manageable provided countries proceed with deficit reduction plans.

    For 2011, Japan and the United States face the largest public debt rollovers of any advanced economy at 56 percent and 29 percent of gross domestic product, respectively.

    "While the United States and Japan continue to benefit from low current (borrowing) rates, both are very sensitive to a potential rise in funding costs," it said.

    http://www.bnn.ca/News/2011/4/13/Banks-face-36T-wall-of-maturing-debt-IMF.aspx

    #2
    saw an article the other day that said 32 of the 50 american states are bankrupt. the imf has given a debt warning to the americans as well. if that discourages qe3 it is thought it will be deflationary.

    Comment


      #3
      http://www.youtube.com/watch?v=661pi6K-8WQ

      if you think the rich have all the money. Very good explanation of the economic state of 3.2T of debt.

      Comment


        #4
        Maybe deflationary?

        If the us government wasn't printing money to buy
        its own debt,you could bet interest rates would be
        north of 20%.

        All levels of government bankrupt
        Most households bankrupt
        most companies bankrupt

        Zero tax revenues
        no paychecks to any government employees
        no paychecks to policemen
        no paychecks to mailmen
        no paychecks to power plant employees
        no food stamps to 50 million people who are
        currently on food stamps let alone the 200 million
        that would be looking for them in the future
        no monthly social security checks
        no medicare/medicade
        no paychecks to military personel
        no paychecks to wounded or vets

        This is not some "maybe" thing,run the numbers.

        It is the mother of all rocks and hardspots.

        Comment


          #5
          if the usd wasn't the reserve currency the usa would be greece. the rock and the hardspot just keep getting closer together.

          Comment


            #6
            Technically the good ole U S of A has been broke since the 1930's not long after the creation of Private Federal Reserve Cartel in 1913, & that was the plan. Now Humanity will have to pay fer the rest of our days through taxes, taxes, & more taxes. Time to wake up folks yous being run by a Shadow Government. Follow The Money.....

            http://www.businessinsider.com/libya-all-about-oil-or-all-about-banking-2011-4

            Comment


              #7
              "The Three Stooges Parody

              Comment


                #8
                ShitHarperDid.com

                Comment


                  #9
                  Stubble,

                  Direct from the English Debate:


                  01:46:50

                  Layton:
                  But if that's the promise you're making, but unfortunately your party has a rather long history of making promises in elections and breaking them after.

                  01:46:57

                  Ignatieff:
                  But Jack, at least we get into government you've been in opposition forever.

                  01:47:00

                  Layton:
                  Well there's the sense of entitlement again, same old attitude.



                  Read it on Global News: Global News | INTERACTIVE: Federal Election Leaders' Debate 2011

                  Comment


                    #10
                    And who is the National Citizens Coalition you ask? Oh right Stephen Harper used to be the President of it,
                    and they stand for small government, interesting that HIS gov't has the largest deficit OF ALL TIME.

                    AND THIS Started Before the stimulus spending

                    Comment


                      #11
                      Land Destroyer Report

                      Naming Names: Your Real Government

                      http://landdestroyer.blogspot.com/2011/03/naming-names-your-real-government.html

                      Comment


                        #12
                        Ultra right wing extremists, something the Germans had right before H took over, fooled the population into believing their bullshit was for the common good, turned out to be most horrible thing the world has seen. Only good for a while for the extremist coward that locked himself in his leader room and dictated everything.

                        Here's the funniest thing I read all day they quote integrity and transparency as their goals.

                        Prostitutes, fraud artists, and swindlers at the hill hm so much itegrity.

                        Comment


                          #13
                          You are referring to the "National <b>Socialist</b> German <b>Workers</b> Party". Who were not on the right side of the political spectrum but the extreme left.

                          And if you believe that Harper is heading down the same road as them then you are ****oo for cocoa puffs.

                          What is it about lefties, that when someone starts talking about maybe lowering the odd tax here and there they think the next third reich is around the corner.

                          Comment


                            #14
                            Mustard, you do have a point about Harper's spending. Its a very good point.

                            That is one of the most disappointing things about him. I thought that he was a strong fiscal conservative and to date he has shown us that he is not.

                            However there is a problem with that argument.

                            Every time Harper has spent a stupid amount of money, such as on the stimulus plan and the auto bailout the only thing Ignatieff thought was wrong was that it wasn't <b>enough</b> money being spent.

                            Harper spent too much. Yes, absolutely. The problem is Ignatieff, according to what he said at the time, would have spent even more.

                            Comment


                              #15
                              You should study up on your history Franny and don't be so hung up on the word "socialist" in the way it's bandied about in Western Canada. If the National Socialist German Workers Party was ultra left wing how come they despised the communists but adored Mussolini's fascists?

                              Comment

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