Not so long ago I was joking that either Citibank or HSBC going bankrupt would be a really spectacular event as both are based in one country yet have the bulk of their interests overseas, so who would support them?
Well, it’s happened to Citibank now and it turns out that the American government figured that if they were allowed to go to the wall it would be just that little bit too spectacular to happen so they’ve bailed them out. One wonders how long it can be before we see if the UK government have a similar view of HSBC although that might be quite a while from now as HSBC management dumped the problem HFC quite some time ago and that’s where a lot of their high risk loans lay.
But when you’ve the situation of the largest banks in the world at risk like this it sounds to me that it’ll be quite some time before we get ourselves out of this particular financial mess.
Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.