write-downs

Business loan write-offs are at an all-time high, according to data from the Bank of England. Sterling write-offs to non-financial corporations – which just means businesses that aren’t banks – reached almost £2.5bn in the last quarter of 2010, higher than the previous record of £2.4bn in Q409 (at least as far back as 1993). This is about half a per cent of all loans to NFCs.

NFC write-offs make up half of all sterling write-offs, exceeding credit card write-offs, which also rose significantly q-o-q. Total write-offs are slightly below the Q409 record, mainly because write-offs are lower for individuals’ loans that are neither credit cards nor secured on dwellings. Read more

Ralph Atkins

The headline news from today’s Bundesbank financial stability review is about the €90bn in further write-downs it expects from German banks. But there are some insights on Bundesbank thinking on monetary policy as well – although Axel Weber, Bundesbank president, was not at the press conference to elaborate.

In particular, the Bundesbank favours an eventual return to “variable rate tenders” in liquidity-providing operations, in which the European Central Bank determines the amount of liquidity injected into the bank system. Since the collapse of Lehman Brothers it has, instead, been matching banks’ bids in full at a fixed interest rate. Read more

Japan prepares to unwind part of its stimulus package as the IMF warns the country’s debt path is out of control, raising a “real risk” that the country could end up in default. Further echoes of the start of the crisis, as CIT files for bankruptcy, an analyst cautions of further Citi write-downs, and concerns about commercial real estate spread across the Atlantic Read more