Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

News Bank storm reaches Europe

  1. Sep 29, 2008 #1


    User Avatar
    Staff Emeritus
    Science Advisor
    Gold Member

    It seems that the storm has finally reached the shores of Europe. Fortis is partly nationalized in Holland, Belgium and Luxemburg - I'm a customer with Fortis, btw. It is the biggest bank in Belgium, and one of the biggest in Holland.

  2. jcsd
  3. Sep 29, 2008 #2


    User Avatar
    Staff Emeritus
    Science Advisor

    and -

    Mortgage lender Bradford & Bingley (B&B) is to be nationalised, the government has confirmed.


    I wonder how much bad debt they have in the US?

    It appears UK/EU economies are similarly over-leveraged as is the US.
  4. Sep 29, 2008 #3
    I'm way out of my league her, but this is my understanding as told in de media:

    Actually there seems not to be so much wrong with Fortis at all. It's just a question of thrust and faith. Fortis bought the Dutch ABN-AMRO bank but now when it is time to produce the cash for that, there were some solvability problems due to crises elsewhere in the world. So Fortis finds itself unable to cope with the agreement and is working on solutions. The thing what would hurt the most is that people don't understand this and start panicking, leaving the bank. And of course, a bank without customers is no bank.

    So proceed, carry on, nothing to see here.
  5. Sep 29, 2008 #4


    User Avatar
    Science Advisor
    Gold Member

    "finally reached"? B&B is the second bank to be nationalised.
    The nationalisation of Northern Rock in February was one of the first signs of the credit crunch. The banking industry is so international nowadays that severe problems in one country will immediately affect whole developed world.
  6. Sep 29, 2008 #5


    User Avatar
    Science Advisor
    Homework Helper

    Ironically it's not clear there was anything actually bad about Northern Rocks portfolio in terms of bad mortgages. It just needed short term credit at a time when the city was suddenly refusing to lend cab fare, the request to the bank of England for credit caused a panic and a run on the bank.
Share this great discussion with others via Reddit, Google+, Twitter, or Facebook