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[Quote of the Week] “What is crystal clear is that somebody has been placing big bets on whether or not the banking equivalent of Borat will blow up.”
Posted on May 1st, 2009 1 comment Share/Save Print
Gillian Tett, Assistant Markets Editor of the Financial Times, discussing Morgan Stanley’s dealings with BTA Bank, one of Kazakhstan’s largest banks. When institutions including Morgan Stanley demanded repayment on loans issued to BTA, BTA was forced into partial default.
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1 responses to “[Quote of the Week] “What is crystal clear is that somebody has been placing big bets on whether or not the banking equivalent of Borat will blow up.””
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“What is playing out at BTA, in other words, is merely a foretaste of what awaits part of the Western corporate scene too. Call it, if you like, the new face of financial globalisation, albeit one that is unlikely to look quite as funny as those Borat jokes, as companies and investors finally wake up to the implications of this deceptive new credit world.”
This is actually quite a frightening precedent - if this accusation is true and this practice spreads to other banks, and beyond banks, then we will have the financial apocalypse on our hands. A CDS market blow-up would be far worse than sub-prime.
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Worth a Thousand Words ...
Sam VanDerlip May 1st, 2009 at 11:45