A Tale of Two Crises — and One Is Even in France
If low rates and a return to deflation are needed to help the banks, then the vexed mathematics of pensions will raise their head again.
John Authers is a senior editor for markets and Bloomberg Opinion columnist. A former chief markets commentator at the Financial Times, he is author of “The Fearful Rise of Markets.”
French lessons on pensions.
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Lots of bad things can happen to banks. Their customers can pull their money out (a liquidity crisis). Their borrowers can fail to repay their loans (a solvency crisis). Their shareholders can sell their stock, sending their shares down (a confidence crisis, making it far harder for them to raise money). And beyond true crises, changes in economic and financial conditions can attack their profits — which is bad for shareholders and ultimately might tend to imperil everyone connected to the bank.
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A Tale of Two Crises — and One Is Even in France
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