A number of European financial institutions have launched or completed cash-raising exercises in recent months. Although ostensibly aimed at shoring up balance sheets undermined by past excesses, the following report from Thomson Financial, "Fortis Made Cash Call in Face of Expected U.S. 'Meltdown' - Chairman," indicates at least some moves may have been motivated by other considerations.
Expectations at Fortis that the U.S. markets are on the verge of "meltdown" were behind the Benelux bank's decision last week to launch a sweeping recapitalisation programme, said chairman Maurice Lippens.
"We were saved at the last minute. Things in the U.S. are going far worse that people think," Lippens said in an interview with De Telegraaf.
Forecasting bankrupties among U.S. banks amid declining credit cover, and also citing Citigroup and General Motors as blue chip companies impacted by the turmoil, he was quoted as saying: "The U.S. is heading for complete meltdown." Fortis last week surprised shareholders with recapitalisation measures worth a total of 8.3 billion euros, including a 1.5 billion euro capital hike.
(Hat tip to KF)
Any previous predictions from these folks at Fortis, to see how accurate they have been in the past?
Sounds ominous....
Posted by: farang | June 30, 2008 at 07:07 AM
About a few weeks ago, Bank of Scotland made similar ominous predictions.
Posted by: wawawa | June 30, 2008 at 05:02 PM
"We were saved, right at the last minute" ??? NOT SO FAST THERE MR. LIPPENS.....
Posted by: mw | June 30, 2008 at 09:51 PM