Friday, October 21, 2016
Marc Faber : European Banks are in a very poor Financial Condition
Latha: Over the next quarter or two quarters, what do you see as red flags for the market, could it be the European banking system for instance?
Marc Faber : Yes, this is a concern. European banks are in a very poor financial condition. They will need more capital but in theory, the European Central Bank (ECB) and other central banks can essentially provide liquidity to the established banks and the governments if they like. They can basically bail out banks. They may have bail-ins here and there where some bond holders -- like there are coco bonds outstanding -- would get hurt to some extent but basically the government can essentially buy shares in the Commerzbank or Deutsche Bank and recapitalise them. As a result of that, the government will be an owner of the 50 percent of the bank or 30 percent or whatnot. That is all possible. We just don't know. We are writing a report about this in a not-so-realistic economic and financial world.-- in CNBC-TV18
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Posted by Nicole Bourbaki