Leon Black: Europe Banks to Shrink Dramatically
By Ekaterina Shatalova and Scott Rose, from Bloomberg
European banks need to sell 1.5 trillion euros ($2.1 trillion) in assets because of the region’s sovereign-debt crisis, said Leon Black, head of private-equity firm Apollo Global Management LLC.
“Banks need to sell a trillion and a half euros of assets off their balance sheets in the next few years,” he said today at an investment forum in Sochi, a resort town in southern Russia. “There are going to be great sales and they have already started.”
U.S. Treasury Secretary Timothy F. Geithner made his first-ever appearance at a regular meeting of European Union finance ministers and central bankers today to urge them to find a solution to their sovereign-debt crisis. Government debt, together with high unemployment and a weak housing market are pushing the region into a recession, Black said.
Concern over sovereign debt levels in Greece, Portugal, Spain and possibly Italy will drive banks to unload whole companies, real-estate loans and non-performing debt, according to Black.
Those assets would give investors “extraordinary opportunities” to diversify away from sovereign debt, he said, adding that Apollo would be interested in having Russia as a co-investor on some of the assets.
Dr. Pinna says:
Is this the beginning of the end? Unlikely!
Banks are like mushrooms as mentioned in my recent article. They have a tight web of connections throughout society. They control all governments. They control the media. They control the people through propaganda.
They may shrink for a while, as they have in the USA in the last five years; but below the surface the web is tightening.