Global Banks Face $5 Trillion Credit Squeeze

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Banks across the globe had to raise trillions of dollars in capital as a result of the financial crisis, and now the bill for that borrowing is coming due.

It’s not a pretty picture. Worldwide, banks must repay or roll over $5 trillion of debt to bondholders and other creditors through 2012, according to the Bank for International Settlements.

“There is a cliff we are racing toward — it’s huge,” Richard Barwell, an economist at Royal Bank of Scotland, told The New York Times.

“No one seems to be talking about it that much. (But) it’s of first-order importance for lending and output.”

Of the $5 trillion total, European banks owe $2.6 trillion, and U.S. banks $1.3 trillion.


Source: http://www.moneynews.com/StreetTalk/Global-Banks-Trillion-Credit-Squeeze/2010/07/21/id/365228