IMF: Rash of Bank Downgrades Signals Return To ‘Danger Zone’ !

• The financial quakes are getting bigger and coming faster. Stock markets around the world are being hammered. The world is at the cusp of a catastrophic breakdown. The herd instinct of the sheeple is driving them into the USD and US treasuries. Both of which are not safe. Gold and silver were hammered in the process. This is a great time to buy physical gold !
  –
  Rash of bank downgrades signals return to ‘danger zone:’ IMF
  by Barrie Mckenna, http://www.theglobeandmail.com/
  Europe’s big financial institutions are under pressure to quickly secure tens of billions of euros of new capital, as the continent’s spreading debt crisis increasingly engulfs the banking system.
  –
  The International Monetary Fund warned the global financial system is more vulnerable now than at any point since the financial crisis of three years ago, as Europe’s debt crisis risks trigger a treacherous slide back into the widespread instability that prevailed during the darkest days of 2008.
  –
  “We are back in the danger zone,” IMF director José Vinals said on the eve of a key meeting of global finance ministers and central bankers in Washington. “Some European banks urgently need to bolster their capital levels,” the IMF said in its semi-annual Global Financial Stability Report.
  –
  Highlighting the growing financial risks in Europe, Standard & Poor’s downgraded seven large Italian banks over the continent’s sovereign debt woes – a day after it downgraded Italy’s government debt. The downgrades show financial market angst is spreading from troubled government finances to troubled banks.
  –
  In the U.S., meanwhile, Moody’s Investors Service on Wednesday downgraded the debt ratings of the three largest U.S. banks – Bank of America, Citibank NA and Wells Fargo, citing a reduced likelihood that the United States government would ride to the rescue in the event of a failure.
  –
  The U.S. government is “more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled, as the risks of contagion become less acute,” Moody’s analysts said in a statement on Bank of America and Wells Fargo.
  –
  U.S. banks are suffering a hangover from the deep housing slump and the recession, which wiped out trillions of dollars worth of Americans’ wealth. Bank of America has improved its capital and liquidity positions, but the bank’s mortgage portfolio contains risks, Moody’s said.
  –
  European banks are caught in a more immediate squeeze. Saddled with large holdings of risky European sovereign bonds, they’re facing woes, faltering capital bases and, now, an apparent run by foreign investors.
  –
  …. for the full article click here!

end