Hard Landing for Eurozone
Nouriel Roubini, Financial Times | September 22, 2008
The demise of the shadow banking system began last week. ++ This is the financial crisis of the century. ++ Shadow banks are not protected from bank runs, as commercial banks are. ++ A run on hedge funds is highly probable. ++ If these institutions are to be government-insured, they will need regulation in order to avoid any moral dilemma implications. ++ A “severe” US recession is imminent. ++ The eurozone is in bad position; a host of negative variables will lead to a “hard landing” for European financial institutions.
