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By Ambrose Evans-Pritchard, International Business Editor
Published: 9:57PM BST 10 Jun 2009
http://www.telegraph.co.uk/finance/e...-drags-on.html
Published: 9:57PM BST 10 Jun 2009
http://www.telegraph.co.uk/finance/e...-drags-on.html
Dejan Krusec, the ECB's financial stability expert, said the banks are strong enough to weather the current downturn so long as there is a rapid "V-shaped" recovery but not if it takes longer to refloat the economy.
"If this is 'U-shaped', the banks will have problems. There are 25 banks we monitor that are strategically important," he told a Fitch Ratings conference on Eastern Europe.
"The problem is not 2009. Euro-area banks are well enough capitalised to cover losses. The problem is 2010. We are concerned about the length (of recession)."
[..]
“Survival is going to be very tough for the majority of privately-owned banks in Ukraine,” said James Watson, Fitch director in Moscow. In a “worst case” scenario, write-offs will amount to $135bn in Russia, $46bn in Ukraine and $38bn in Kazakhstan. Even the “base case” entails losses of $122bn for these three states alone. Russia’s private companies borrow in dollars because it is hard to issue rouble bonds. They must roll over $145bn of foreign debt this year, and pay interest from revenues in devalued roubles. Construction firms face the worst crunch.
"If this is 'U-shaped', the banks will have problems. There are 25 banks we monitor that are strategically important," he told a Fitch Ratings conference on Eastern Europe.
"The problem is not 2009. Euro-area banks are well enough capitalised to cover losses. The problem is 2010. We are concerned about the length (of recession)."
[..]
“Survival is going to be very tough for the majority of privately-owned banks in Ukraine,” said James Watson, Fitch director in Moscow. In a “worst case” scenario, write-offs will amount to $135bn in Russia, $46bn in Ukraine and $38bn in Kazakhstan. Even the “base case” entails losses of $122bn for these three states alone. Russia’s private companies borrow in dollars because it is hard to issue rouble bonds. They must roll over $145bn of foreign debt this year, and pay interest from revenues in devalued roubles. Construction firms face the worst crunch.