IMF: European Banks Look Like Debt Dogs
According to latest the IMF estimates, the debt woes that have engulfed peripheral EU Nations could mean losses of over $410 billion for European banks with exposure to this debt. The banks will need to shore up capital adequacy to the extent of over $200 billion. Many banks will probably not be able to implement this without government help, says the IMF.
According to the IMF’s report released Wednesday, “risks to global financial stability have increased for the first time since the collapse of Lehman Brothers in 2008.” Apart from public financial support to the banks, some banks may need to be restructured.
Hopefully cutting to the bone will held after 70,000 planned staff cuts have been announced at European banks (NYSE:KBE) this year by top firms including UBS (NYSE:UBS), Deutsche Bank (NYSE:DB), Barclays (NYSE:BCS), Royal Bank of Scotland (NYSE:RBS) and Lloyd’s (NYSE:LYG).