For all the cash provided by the European Central Bank to ease the worst seizure in credit markets since World War II, financial institutions in the region are unwilling to lend, using the money instead to invest in the safest, most liquid government securities. Bond investors are offering money like never before as returns on corporate debt reach as much as 70 percent this year, according to Merrill Lynch & Co. indexes.
The result is corporate bond sales in Europe are exceeding the amount raised through bank loans for the first time, with issuance by non-financial companies doubling to a record 337 billion euros this year. Syndicated loans, or debt underwritten by a group of banks which they then sell to investors, fell 46 percent to 279 billion euros, data compiled by Bloomberg show.
European banks, which have lost or written down $561 billion in the credit freeze, are awash with cash after governments approved $5.3 trillion of aid, more than the annual gross domestic product of Germany, European Union data show.
Source/Full Story: Bloomberg.com
Related Items
- November 13, 2009 — U.S. Posts $176.36 Billion Deficit for October
The federal government kicked off fiscal year 2010 by posting its widest-ever October budget deficit, the Treasury Department said Thursday.The $176.3… - July 27, 2009 — The collapse in Britain’s economy now rivals the worst days of the Great Depression
Economic output shrank by 5.6pc in the 12 months to the middle of the year, according to official figures which shattered hopes that the recovery has … - July 15, 2009 — As federal debt soars, where’s all the money to come from?
As the Obama administration wrestles with how to pay for a costly revamp of the health care system and whether to spend more to spark a nearly lifele… - May 15, 2009 — Europe’s Economy Contracts 2.5%, the Most Since 1995
Europe’s economy contracted at the fastest pace in at least 13 years in the first quarter as companies cut output and jobs to survive the worst globa… - April 28, 2009 — Economic costs of a flu pandemic
However, health experts have long warned that the next flu pandemic was overdue and urged countries around the world to prepare for the dramatic econo…
