IMF

IMF WARNS ON EUROPE’S BANK ASSETS DELEVERAGING.

BALANCE SHEETS TO BE CUT BY $2.6 TN OVER THE NEXT 18 MONTHS.

HOWEVER IN ITS LATEST GOBAL FINANCIAL STABILITY REPORT, WHILE ACKNOWLEDGING THAT BALANCE SHEETS NEED TO SHRINK AFTER THE FINANCIAL EXCESS SEEN IN THE RUN-UP TO THE CRISIS, THE IMF WARNED THAT THE RISK OF A « SYNCHRONISED AND LARGE-SCALE DELEVERAGING  » COULD SPARK FINANCIAL INSTABILITY AND UNDERMINE ECONOMIC GROWTH.

THE IMF EXPECTED MOST OF THE DELEVERAGING TO COME FROM SALES OF SECURITIES AND NON-CORE ASSETS.

TO US IT JUST MEANS THAT TOP EUROPEAN BANKS HAVE NO OTHER OPTION THAN TO RECAPITALISE AND RESTRUCTURE !

PHLDUCX