Ovetii States BOE believes Banks could Face Shocks after Credit Collapse

Released on: December 4, 2007, 1:38 am

Press Release Author: Report-24

Industry: Financial

Press Release Summary: Ovetii recently reported that the Bank of England had said
the global financial system is at risk of further instability because of ``ongoing
uncertainties\'\' about credit-market losses.

Press Release Body: According to reports by Ovetii sources, the central bank said in
its financial stability report that markets are now more susceptible to a potential
slump in global stocks, a slide in the dollar or a crash in U.K. commercial property
after the U.S. subprime mortgage collapse. Merrill Lynch & Co. yesterday reported
the biggest quarterly loss in its 93-year history after $8.4 billion of write-downs.

A senior Ovetii analyst reportedly stated that financial systems in advanced
economies are vulnerable to further shocks, either in credit markets or from new

According to sources, Ovetii researchers believe that investors are assessing the
fallout from a credit-market rout that led to a surge in borrowing costs and a run
on the deposits of U.K. mortgage lender Northern Rock Plc. The recent report said
British banks are still hoarding cash to protect their balance sheets, which may
keep credit conditions ``tight\'\' into next year and make it harder for borrowers to
manage debt.

Ovetii reports also apparently revealed that while the central bank had said ``there
have been signs of recovery\'\' in money markets, the interest rate that banks charge
each other for three-month loans hasn\'t returned to the level before credit costs
surged on Aug. 9. The London interbank offered rate, which was 6.05 percent at the
start of August, was 6.28 percent yesterday. It touched a nine-year high of 6.9
percent on Sept. 11.

Web Site: http://

Contact Details: lwreading@report-24.info

  • Printer Friendly Format
  • Back to previous page...
  • Back to home page...
  • Submit your press releases...