Germany to Suffer From British Banking Bust
Fallout from the UK banking disaster could soon affect the German economy as well. One must wonder how far it will spread. Is Utah next?
SpiegelOnline reports:
The crisis at the British mortgage financer Northern Rock could also affect German investors and banks, SPIEGEL has learned.
As a result of the US subprime mortgage crisis (more…), the fifth-largest British mortgage lender got into refinancing problems last week and had to be bailed out with a financial injection from the Bank of England.
Like financial institutions in the US, Northern Rock had been re-selling mortgage debt to investors for years, in the form of exotic financial instruments bearing confidence-inspiring names like Granite, Dolerite and Whinstone.
Among those investing in such securities were German investment funds, who were attracted by their generous interest rates. According to its half-year report, funds offered by the Deutsche Bank subsidiary DWS Investments have stakes in Granite, while Allianz Global Investors has funds with investments in Granite and Dolerite.
A banking bust here in the United States could cause depositors to lose any deposits beyond $100k. For that reason, it’s often wise to invest excess funds in your own home. This can be accomplished using a Utah home equity loan.
Comments
Leave a Reply
You must be logged in to post a comment.