Subprime hit Europe harder than U.S.
TEXT OF STORY
Renita Jablonski: European executives seem to be having more headaches about the credit crunch than execs in the U.S. New figures from an American think tank show banks overseas have shouldered the bulk of the losses from the subprime debacle. From London, Stephen Beard reports.
Stephen Beard: This will be galling news for the Europeans. The crisis was made in the U.S. with thousands of American subprime mortgage holders defaulting. But according to the Institute of International Finance, European banks have picked up the larger part of the tab. So far, they’ve lost $200 billion on debt securities — $34 billion more than their American counterparts.
David Buik is with the BGC group. He says it all goes to show how adroit the Americans have been at shifting their complicated financial products abroad:
David Buik: Well in the United States of course, they are incredibly good at sales. When there is a secondary product to come out, whether it is a derivative or a cash product, there is no peer in the realm like the United States of America for doing it.
As the supposedly prudent Swiss now know to their cost, the largest subprime casualty of all has been Switzerland’s largest bank, UBS.
In London, this is Stephen Beard for Marketplace.
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