Poised for 'Nuclear Deleveraging'?
Financial Armageddon: Poised for 'Nuclear Deleveraging?: "The use of sub-prime debt structures was also a feature of other markets, such as private equity, where $US300 billion in loans were due to be refinanced in the next two years.
Mr Das said another $US1-$US5 trillion of assets would have to come back on to US bank balance sheets as a result of defaults on housing and other debts, and it was unclear how the banks could fund them -- issuance of preference shares by US banks was already at a record high. He said losses at financial institutions from the credit crunch were likely to almost double to $US400 billion.
There were also second-round effects to come as the damage done to the real economy from financial sector losses fed back into further bank losses."
Mr Das said another $US1-$US5 trillion of assets would have to come back on to US bank balance sheets as a result of defaults on housing and other debts, and it was unclear how the banks could fund them -- issuance of preference shares by US banks was already at a record high. He said losses at financial institutions from the credit crunch were likely to almost double to $US400 billion.
There were also second-round effects to come as the damage done to the real economy from financial sector losses fed back into further bank losses."
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