At least one bank CEO in the UK is expressing worry about a massive funding wave in Europe, as governments and banks compete for funds in the first half of 2011.
This Telegraph article on the prospects for a “second credit crisis” (the first one ended?) is getting attention:
Banks alone must refinance about €400bn (£343bn) of debt in the first half of the year, but add in the more than €500bn European governments must replace over the same period, as well as further hundreds of billions of euros of mortgage-backed debt maturing and there is the potential for chaos in the credit markets.
“What we are looking at here clearly has the potential to become a second credit crunch. However, this time it would be much worse than before,” said Celestino Amore, founder of IlliquidX, which specialises in trading hard-to-price debt.
Watch for a rush to get out in front of this:
The chief executive of one major UK retail bank told The Sunday Telegraph that he thought things could get “sticky” in the first half and that his bank was accelerating its issuance plans.