Eurozone’s banks are “in tatters” says Ken Clarke

Former chancellor Ken Clarke has said Europe’s banking system is “in tatters”, warning the UK is “heavily exposed” to potential problems.

The justice secretary also told Sky News that Greek voters had to “face up to reality” by voting for parties willing to cut the country’s deficit.

He added that electing “cranky extremists” would worsen the situation.

The comments come after Prime Minister David Cameron used the G8 summit to urge action to end the eurozone crisis.

Voters in Greece return to the polls next month after the recent general election left no party in control and efforts to form a coalition government failed.

There is uncertainty over whether the country, beset by problems arising from its debt levels, will remain in the European single currency.

Mr Clarke, a strong supporter of the European Union, told Sky News’ Murnaghan programme: “The Greek voters have really got to face up to reality – it is very, very difficult for them. They are having a terrible time.”

But he said the consequences would be “serious” if the Greek people elected “cranky extremists” and defaulted on their debts as a result, adding: “Everyone says they will leave the euro. Actually that is quite likely but doesn’t necessarily follow…

“No-one knows exactly what will happen in the rest of Europe. But the banking system is in tatters. It is weak in very many places.

“We don’t know what the knock-on effects would be, they could be very serious and of course people will start barking at the door of Portugal, Ireland, Italy and here in Britain.”

Mr Clarke, who served as chancellor under Conservative prime minister John Major in the 1990s, defended the coalition’s decision to increase the UK’s contribution to the International Monetary Fund, despite the US refusing to do so.

He added: “It is a pity that the Americans are so paralysed by their pre-election arguments that they are not able to contribute, but all the more reason for the British, the Brazilians, the Chinese and others to be persuaded to put in because it is quite essential.”


hes right..greece is the least of their worries..look at spain italy and frances runs are coming for them..


~ by seeker401 on May 22, 2012.

9 Responses to “Eurozone’s banks are “in tatters” says Ken Clarke”

  1. Where there’s smoke there’s fire … JP is about to go up in flames …

    FT: JPMorgan Unit Holds $100 Billion of Risky Bonds

  2. here tday with Lindsey again let’s see
    P eter well….. he said the same on 2010

  3. Jim Sinclair’s Commentary

    The following table is on page 73 of the 82 pages of the last NY Fed ‘stress’ test for JPM.

    Comprehensive Capital Analysis and Review 2012
    Table C.10: Federal Reserve Estimates in the Supervisory Stress Scenario
    JPMorgan Chase & Co.

    Projected Losses, Revenue and Net Income before Taxes for Q4 2011 through Q4 2013 Under the Hypothetical Supervisory Stress Scenario Billions of Dollars Percent of Average Assets
    Pre-Provision Net Revenue [see footnote](2) 59.3 2.7
    Other Revenue [see footnote](3) 0.0
    less Provisions 48.9
    less Realized Losses/Gains on Securities (AFS/HTM) 3.8
    less Trading and Counterparty Losses [see footnote](4) 27.7
    less Other Losses/Gains [see footnote](5) 1.7
    equals Net Income before Taxes -22.9 -1.0

    Projected Loan Losses by Type of Loans for Q4 2011 through Q4 2013 Under the Hypothetical Supervisory Stress Scenario Billions of Dollars Portfolio Loss Rates (%)
    Loan Losses [see footnote](6) 55.8 8.1
    First Lien Mortgages, Domestic 7.0 6.3
    Junior Liens and HELOCs, Domestic 9.1 10.5
    Commercial and Industrial 11.4 9.0
    Commercial Real Estate, Domestic 1.8 3.0
    Credit Cards 21.3 18.0
    Other Consumer 2.1 3.6
    Other Loans 3.0 2.4

  4. The Truth About JP Morgan’s $2 Billion Loss

  5. JP Morgan Black Swan?


    • “Maybe I am a grouch,” writes the New Yorker’s John Cassidy. “But it all sounds suspiciously like an inside job, in which the last ones in, the ordinary investors, are the saps. At the very least, this entire issue is something that the authorities – the S.E.C., but also the Nasdaq and other stock exchanges – should be looking at closely.”

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