In an article titled
"Credit crunch gives banks $11bn headache
A torrid market for higher-risk debt has left Wall Street investment banks struggling to sell loans and bonds worth $11 billion"
my response was duly published. For what its worth here is what I said then.....
What have markets, regulators and investors learned from Michael Milken in '80's (who coined the junk market) and subsequent failures at Enron & LTCM? Not much by the looks of it. What no-one in the financial press is mentioning is that all this over-excessive debt parcelling wouldn't be possible without an accounting failure on a monstrous level. Looking at any balance sheet (especially bank balance sheets) for any multi$bn company is such a maze. It's only a matter of time before several banks get bailed out and then investors, etc will be taking a closer look at these balance sheets and come to the conclusion that transparency is hardly taking place. Can someone please explain to me what the point of regulation is?
Richard Hoblyn, CofL, UK
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