Josef Ackermann may be right. The structured finance squall may be settling.
But the credit crunch shows no signs of abating just yet.
Consultancy Oliver Wyman is to put out a report later today which will outline expected losses facing Europe’s banks on the back of a retail lending downturn. The headline number is €120bn between 2008 and 2010.
Spain, meanwhile, will suffer a subprime crisis all of its own. Unlike the US, though, there isn’t anywhere near the structural leverage in place that would make a housing crisis systemically threatening. A sharp downturn then, but “the situation will not get to the levels of the crisis that hit Spain in 1993.”
In banking terms, this is the broad blunt and uncomfortable end of the wedge. There is going to be downturn in consumer lending and it is going to hurt. Commercial giants like HSBC and Santander are going to suffer. But a crisis should also prove the resilience of those banks too. A downturn won’t cripple them, like subprime has the big IB’s, and it won’t constrain expansion in other emerging markets.
Further down the food chain though, and the effects will be more acute. Lloyds TSB, for example. Or else the already hammered likes of HBOS or B&B.
Oliver Wyman isn’t necessarily saying anything new, but the report gets the numbers out there. Any advances?
Related links
In praise of Santander - FT Alphaville
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