bank run

Poul Thomsen wrote an article on the IMF’s blog site about Iceland that I would to highlight. The lessons bear repeating given the economic problems in Europe and the US. The IMF worked with Iceland to stabilise the economy and avoid…

The data have shown that deposit flight out of the euro zone into the US just isn’t happening. But what about intra-euro zone deposit flight? Here’s a chart from the Council on Foreign relations that suggests this could be a story supported…

These governments have to know that these bailouts are going to affect their credit ratings. They need to steer clear of worsening that credit profile in a panic environment. The only way they can do so is by clipping bondholders instead of…

As we reported on Friday, Dexia, the troubled Franco-Belgian bank, has been nationalised over the weekend. At the time, I indicated this would be a negative for the sovereign’s creditworthiness. Moody’s, the ratings agency, agrees and has…

Franco-Belgian bank Dexia is being officially nationalised according to two Belgian newspapers.

This is going to be a relatively long post. But I think it’s important. I have been meaning to update my thinking about the “Fake Recovery” which I heralded in early 2009 as the economy in the US began to turn. My view is that without…

Last week I excerpted from Herbert Hoover’s 1930 State of the Union address. This time I wanted to excerpt from the 1931 SOTU because the Credit Anstalt event had already happened, triggering retail deposit runs. Bank runs is something…

At some point soon, maybe tomorrow, I will be writing an update to two posts: The Fake Recovery and The recession is over but the depression has just begun. The gist of those two posts is still operative and also very relevant, namely that…

Here’s what I am hearing. At the end, I will tell you how far-fetched I think these things are.

What will the Europeans do here then? I am anticipating bailouts, liquidity injections and capital injections. But this is looking pretty dismal now so it is not clear if that will be enough.