Monday, February 7, 2011

Let The Haircuts Begin!

The Danish government today seized Amagerbanken, the country's eighth largest bank per Bloomberg. Under new regulation, senior bond holders and depositors above the insured limit will take a 41% haircut. It is about time! Just like Tunisia led the first of many revolutions against oppression, perhaps Amagerbanken will lead to many senior bondholders assuming risk for a change.

Elections in Ireland are coming and Fine Gael will be able to site this example for similar actions in Ireland. But if the politicians can't force the issue, the markets will certainly try. Here's the latest from the Irish Independent and don't forget that December saw a 100% increase in bank deposit runs.

REPOSSESSION orders granted by the courts have risen almost six-fold since the peak of the property boom. Figures released by the Courts Service show that the number of orders granted by the High Court and Circuit Courts for the repossession of lands and premises were at their highest last year, a figure that is set to rise as lenders increase their interest rates.


No comments:

Post a Comment