France and Italy stand by to bail out biggest banks as euro crisis worsens (SocGen,Unicredit)

Daily Mail ^ | 08/06/11 | Simon Watkins and Dan Atkins

[TigerLikesRooster]

France and Italy stand by to bail out biggest banks as euro crisis worsens

By Simon Watkins and Dan Atkins

Last updated at 11:46 PM on 6th August 2011

Fears are growing this weekend that two of Europe’s largest banks may require a bailout, having been hugely damaged by the worsening crisis across the eurozone.

In France, President Nicolas Sarkozy is having to confront the possibility that the country’s second-biggest bank, Societe Generale -commonly known as SocGen - is on the brink of disaster after huge losses over loans made to Greece.

The chilling possibility of the largest bank in Italy, UniCredit Banca, suffering a similar collapse if a bailout is not implemented comes as Silvio Berlusconi already faces an increasingly dangerous national economic situation.

In Britain, a senior Government source described the position of the two banks as ‘perilous’, although an official Treasury spokesman declined to comment. Should either bank collapse, British customers with deposits of up to about £85,000 would be protected by the Financial Services Compensation Scheme.

As ministers of the G7 nations - Britain, France, Italy, Germany, Japan, the U.S. and Canada - prepare to meet to discuss the mounting euro crisis, the French and Italian governments are believed to be standing ready to rescue the banking giants.

[TigerLikesRooster]

P!

[dennisw]

Iceland was smart to tell these bozos to take a hike. Icelanders refused to pay onerous taxes to EU members who bailed out their citizens who held Icelandic bank accounts

[Incorrigible]

Wasn’t SocGen one of the secret recipients of US TARP funds?

[sayuncledave]

Better yet: the ancestor of UniCredit is Creditinstalt. Look the name up.

[TigerLikesRooster]

The apple doesn’t fall far from the tree, I guess.

[ConservativeDude]

is on the brink of disaster after huge losses over loans made to Greece.”

And who could have ever see THAT ONE coming???!

[pepsi_junkie]

This is what happened to Japan. Remember them, the mighty juggernaut economy of the 80s that in the 90s sank into a doldrums that hasnt really ended to this day? What happened? There was a bubble based on high land prices, low interest rates, a surging stock market and easy credit. It eventually burst, leaving banks holding worthless paper. The government stepped in and began an endless cycle of bailouts but no significant growth for 20 years. Their version of "the new normal".

Now it's Obama's turn. PErsonally I'd prefer to avoid that, let the normal forces of the economy do their necessary corrections (even if this means some big name firms go belly up) and get back to growth.