European banks may need 18.1 trillion Euro bailout

[Skybird]

I increasingly read messages in German news and also in blogs that the British Daily Telegraph had access to a top secret document of the EU comission that says that european banks are sitting on so huge ammounts of bad papers that they need bailouts worth 18 trillion euros, and saying that more than 44% of current financial possessions of banks are "bad/foul".

After that the Telegraph, so say these news, has been forced by governments to not publish these numbers, to hide these shocking numbers from the public.

On various german blogs and news sits as well, the telegraph got quoted today with these excerpts:

11th February: The figures, contained in a secret European Commission paper, are startling. The dodgy financial packages are estimated to total £16.3 trillion in banks across the EU. The impaired assets may amount to an astonishing 44 per cent of EU bank balance sheets. It is a deep ditch the bankers, regulators and their friends in government have dug us into.
(...)
Estimates of total expected asset write-downs suggest that the budgetary costs – actual and contingent – of asset relief could be very large both in absolute terms and relative to GDP in member states.

In this context it should be noted, that several german and English sites appeareantly have been manipulated and links to the once published document have been hacked or manipilated to be no longer valid anymore. The link mentions the theme, but do not lead to a valid website anymore.

Bloggers and professional journalists alike warn that a very massive attempt to make access to this article impossible has been undertaken.

for comparison: the current US deficit is somewhere between 10 and 11 trillion.

The damage of Us banks have not been included in the secret paper by the EU. It is estimated that it cold be as high as that for European banks, which would mean 30-35 trillion for Western banks alone.

The deveklopement of this catastrophe has been known by goivernments since severla years. Action was refused with regard to not putting political party's power interests at coming elections at risk. At the same time, many new nations have been accepted into the EU, all of which share one similiarity: they are close to a state of being - or already are - bankrupt.

If any good should come from this, I hope it will rip this Frankenstein creation called EU into pieces. But before that happens, we will be served lies, denial and betrayal for breakfast, lunch and dinner for a long time to come.

If anybody has a functional link to that Daily Telegraph article, first published around one week ago or so, please post it.

[Rockstar]

Only thing I found was this by Myra MacDonald LONDON, Feb 18 http://uk.biz.yahoo.com/18022009/323...ation-law.html

... But Germany has agonised over 'Enteignung' (expropriation) of shareholders, a loaded term linked in the minds of many to Nazi seizures of Jewish property in the 1930s.

[Skybird]

Completely different story, has nothing to do with what I mean.

[Skybird]

Something:

http://www.telegraph.co.uk/finance/f...ent-warns.html

Right of the text, there are some links listed under "related content", one of them reads "Toxic EU bank assets total 16.3 trillion".
If you click on it you land on a page saying that no entries exist. Strange, isn't it.

[Skybird]

Ah, finally this seems to be it.

http://forum.globalhousepricecrash.c...hp/t47586.html

European banks sitting on £16.3 trillion of toxic assets may suffer massive losses, according to a confidential Brussels document.

By Bruno Waterfield in Brussels
Last Updated: 1:51PM GMT 11 Feb 2009

A secret 17-page paper discussed by finance ministers, including the Chancellor Alistair Darling on Tuesday, also warned that government attempts to buy up or underwrite such assets could plunge the European Union into a deeper crisis.

National leaders and EU officials share fears that a second bank bail-out in Europe will raise government borrowing at a time when investors - particularly those who lend money to European governments - have growing doubts over the ability of countries such as Spain, Greece, Portugal, Ireland, Italy and Britain to pay it back.

“Estimates of total expected asset write-downs suggest that the budgetary costs – actual and contingent - of asset relief could be very large both in absolute terms and relative to GDP in member states,” the EC document, seen by The Daily Telegraph, cautioned. “

"It is essential that government support through asset relief should not be on a scale that raises concern about over-indebtedness or financing problems.”

European Commission officials have estimated that “impaired assets” may amount to 44pc of EU bank balance sheets. The Commission estimates that so-called financial instruments in the ‘trading book’ total £12.3 trillion (13.7 trillion euros), equivalent to about 33pc of EU bank balance sheets.

In addition, so-called 'available for sale instruments' worth £4trillion (4.5 trillion euros), or 11pc of balance sheets, are also added by the Commission to arrive at the headline figure of £16.3 trillion.

Banks account for their assets in different ways. Assets put into the “trading book” have to be marked to current market values, while those in the “banking book” are loans and other assets which the institution believes it can hold to maturity. Other assets are classified as “available for sale”, which are also marked to market values.

The Commission figure is significant because of the role EU officials will play in devising rules to evaluate “toxic” bank assets later this month. New moves to bail out banks will be discussed at an emergency EU summit at the end of February. The EU is deeply worried at widening spreads on bonds sold by different European countries.

In line with the risk, and the weak performance of some EU economies compared to others, investors are demanding increasingly higher interest to lend to countries such as Italy instead of Germany. Ministers and officials fear that the process could lead to vicious spiral that threatens to tear both the euro and the EU apart.

“Such considerations are particularly important in the current context of widening budget deficits, rising public debt levels and challenges in sovereign bond issuance,” the EC paper warned.

[Zachstar]

I was reading yesterday that a whole slew of East Europe nations are close to default.

You know its times like this when I feel that fusion is the only way out. We don't need bailouts when the problem is THIS big. We need the ability to make a unit of fund do much more work.

[Skybird]

If last summer somebody would have asked me what kind of damage I would expect for the future, I would have said something in the range of 50-60 trillion - ALL TOGETHER. But when just european banks alone, not to mention foreign banks, not to mention the rest of the global economy - if these couple of banks alone have produced a damage worth 18 trillion all by themselves, or roughly arpound one third of the total sum I estimated, then my estimation on the total damage, done in an attempt to follow the principle of realism, would have been very optimistic, I fear.

And people here use to call me a pessimist.