Time Bomb? Banks Pressured to Buy Government Debt
Posted: Thu May 31, 2012 3:01 pmhttp://www.cnbc.com/id/47633576
While that helps governments issue more and more debt, the strategy could ultimately explode if the governments are unable to make the bond payments, leaving the banks with billions of toxic debt, says Citigroup strategist Hans Lorenzen.
Moreover, banks are allowed to not count the sovereign debt against their Base capital requirements.
While that helps governments issue more and more debt, the strategy could ultimately explode if the governments are unable to make the bond payments, leaving the banks with billions of toxic debt, says Citigroup strategist Hans Lorenzen.
Moreover, banks are allowed to not count the sovereign debt against their Base capital requirements.