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Australian Banks Given One Week To Prepare For European “Meltdown”!

It is coming!!!

  • A Eurozone collapse is coming! It is obvious. If you still don’t see it, you are an IDIOT ! Need a 2nd opinion? Click here!
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    Australian Banks Given One Week To Prepare For European “Meltdown”! 
    by Tyler Durden, http://www.zerohedge.com/ 
    Whereas previously we had heard extensive horror stories about banks being told to prepare for the end of the world in case the European summit (the latest and greatest one from last Friday which was supposed to find a cure for cancer among other things) failed, …  once the summit passed (and it was clear that media posturing would do nothing to fix what has already been a failure and it would be best to remove the threats of “reality” from the public’s attention) all such “end of the world” speculation promptly disappeared – after all why remind people that things are now worse than ever. 
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    Until today. According to the Australian Finance Review (link – subscription required), banks down under “have been given 1 week by regulators to stress test how they would handle a spike in joblessness, plunge in home prices spurred by EU debt crisis.” Aka a European “Meltdown.” And since we don’t have immediate access to the article, we leave it to Bloomberg First Word to describe for us what the article says:
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    - Australian Prudential Regulation Authority envision worst-case scenario of 12% unemployment, 30% drop in house prices, 40% fall in commercial property values, AFR says
    - Banks will assume that write-offs, other mitigation measures are unavailable; later stress tests might allow for such steps, AFR says
    Australia’s banks have A$87.2b of exposure to Europe, or 2.7% of assets, with A$74.6b of it mostly tied to bank borrowers in France, Germany, Netherlands, AFR says, citing RBA statistics

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    Why is this notable? Because unlike before, when media reports were really a propaganda ploy to get European politicians to collaborate (what has now proven to be an impossible task), and nothing but a rhetorical device, this time around, the warning is for real. And, more importantly, we have a sense of urgency, courtesy of the 1 week deadline: the question then is is it really that bad, and does Europe truly have a little over a week for global banks to prepare for the inevitable fall out?
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    … for more click here!

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December 16, 2011 - Posted by | Economics | , , , , ,

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