Tuesday, July 14, 2009

Banking Problems

The focus of this Times article is Germany--the new Japan, Paul Taylor speculates--but there is this about France:

Italy, France, the Netherlands, Belgium and, to a lesser extent, Spain are all in denial about the extent of their banking problems, although the Dutch, Belgians and French have had to spend billions of euros of taxpayers’ money to save Fortis, ABN Amro, ING and Dexia.

But there is a puzzle here. Germany is said to be concealing the extent of its banking problems for fear of spooking voters before the upcoming September elections. What is France's excuse? And if the denial of banking problems is such common knowledge that the Times can print it as fact, why aren't French journalists probing more deeply into the alleged difficulties of the country's banks? Why isn't the opposition raising the issue?


Mr Punch said...

Aren't Dexia's problems largely due to German banking? And this, it seems to me, may be the issue across the continent: It's always someone else's fault, so journalists don't find the story interesting. Contrast the US and Britain, where the banks' troubles may be no worse -- hey, WE didn't buy that junk -- but the fault is apparent.

MYOS said...

The Opposition is on a vacation (yesterday I heard Dominique reynié state, plainly, that Martine Aubry HAD TO quit because she's just trying to ressuscitate the old gauche plurielle and, obviously, things have changed since 1997, something she hasn't grasped yet apparently, and someone else indicated that losing half their regions next year wouldn't be so bad...)
Journalists are all into the Orelsan controversy, ie., is it okay to have a rapper whose lyrics include "suck my .. for valentine's or I'll break your teeth" is appropriate for a music festival enjoyed by families, including kids - the controversy becoming one when the former producer accused segolene Royal and Frederic lefebvre defended "freedom of expression" (a great role de composition).
Why, are there banks? Where? doesn't unemployment vanish when leaders are at the beach? Why not banking issues? :)

Leo said...

The problem with such sweeping statements (...are all in denial about the extent of their banking problems) is that they are rich on hype and very poor on facts. What banks? What problems? So Taylor concedes the Dutch texpayers saved ABN Amro and ING. What other Dutch banks are there to save?

Maybe French journalists are not probing because there is nothing to probe. Dexia and Natexis have already been salvaged. There are but 4 significant other banking groups in France: BNP, SG, Crédit Agricole and Crédit Mutuel and they received government equity support. Only Société Générale has significant exposure to Eastern Europe which is the key European banking concern. I would be pleased to hear Paul Taylor's assessment of the individual solvency of each of these banks.