U.S. money-market funds that provide short-term credit to European banks will suffer major losses (about one third of their bank loans are in Europe.) And the operations of big U.S. companies that hold European bonds, or rely on short-term credit, will screech to a halt.
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It castigated the investment bank after one of its analysts speculated that the problem loans of Hana Bank, which is based in Seoul, may be rising.
One explanation is that, as bank loans begin to trade in the secondary markets like ordinary bonds, the banks themselves are less interested in preventing borrowers from imploding than when they kept the debt on their books.
Bank of America, for one, offers loans to companies on the understanding that other investment-banking mandates will follow.
In 1999 the finance ministry decided to set up four asset-management companies, one for each bank, to deal with the bad loans.
After graduating, he worked at a regional bank in Atlanta, underwriting loans like one to a company that developed a way to use a Kevlar strap in construction, eliminating the need for five men to do the dangerous and awkward job of wrapping giant chains around pieces of steel.
The World Bank repaid the devotion with loans making Ghana one of Africa's biggest borrowers.
The bank, like any modern one, held deposits and made loans, dealt in bills of exchange, changed money and conducted business abroad.
Raising equity at that valuation is out of the question, and with conventional bank loans in China having a maximum term of one year, Tri-Tech turned to the bond market, a new source of capital in China, to obtain longer term financing.
The bank attracts deposits and originates and purchases one to four family residential mortgage loans, commercial real estate loans and multi-family property loans.
The merger of Hokkaido Takushoku and Hokkaido Bank will combine two banks saddled with huge amounts of bad loans into one.
One advantage of lending to a bank is that because it can spread risk over thousands of loans, it can guarantee individual deposits.
One part ("the bad bank") will assume all the residential and commercial real-estate loans and securitized mortgages as assets, and all the long-term debt as liabilities.
Federal bank regulators strangled bank operations with requirements to hire outside experts to review each and every one of the four million loans in some stage of foreclosure in 2009 and 2010.
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One encouraging trend for the bank and the economy was a fall of more than a fifth in losses from loans going bad.
He believes that the central bank's new credit guidelines, which include a limit on property lending to one-fifth of outstanding loans, would bring stability in the long run.
Michael Mayo, until recently the top banking analyst for Credit Suisse First Boston, thinks that leveraged lending has been responsible for the recent increase in bad or problematic loans at a raft of American banks, including Bank of America, FleetBoston Financial, Bank One and Wachovia.
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