In the 1930s one of the decisive blows to the global banking system was when the Austrian bank Credit Anstalt failed in 1931. It had international loans and debts that made sense when the Austro-Hungarian empire had still existed and coordinated political legal and military relations between nations. Since that empire had collapsed during WW1 the loans and debts were no longer backed by the same political superstructure. Today, with the shift of Ukraine away from the very shaky and German-dominated EU and towards Russia we might see something similar. Loans have been extended for the last 22 years under the assumptions of an EU/IMF set of political and strategic relationships, which have just shifted seismically to a Russian rule set. So if there is a bank or governmental bond failure in Ukraine today, the IMF and European Central Bank might not come to the rescue since it would be benefiting Russian banks and Russias state owned energy companies stranglehold over Europe. And if Ukraines financial system is allowed to collapse there could be a cascade of impacts on banks in Europe and the US which have made loans to Ukraine.
Posted on: Sun, 24 Nov 2013 18:21:06 +0000
Trending Topics
Recently Viewed Topics
© 2015