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Less Available Credit From European Banks
As self-imposed austerity measures drive the Euro Zone back into recession, economies across the world worry about less available credit from European banks. As the Euro Zone increases its lending limit again the EU is focusing on keeping its own economies afloat. However, the big Euro Zone banks have traditionally had customers all across the world. Clients in Asia, especially, are concerned that a Euro Zone recession will reduce the European demand for Asian exports. A faltering economy in the Euro Zone will further reduce balance sheets and result in less available credit from European banks. Although the combined efforts of the IMF, European Central Bank, and leaders of the EU helped avoid a Greek financial collapse , Spain is now teetering on the brink of disaster and the continent’s third largest economy, Italy, is none too healthy. If worse comes to worst any more low interest rate loans from the European Central Bank to ailing European banks may well come with the stipulation that the money be lent at home and not abroad.
Turning Off Credit to Asia
Will less available credit from European Banks really damage the economies in Asia? After all Japan, Taiwan, and mainland China have large foreign currency reserves. But, there is no clear indication that the national treasuries of these and other Asian nations would open their doors, so to speak, and let borrowers walk right in. When the recession and banking crisis hit in 2008 the effects were devastating to a large number of borrowers across Asia and the Pacific. The large European banks that do business across the world have relationships with their clients and are set up to efficiently lend in time of need. If this source of funds is cut off Asian borrowers might find that they have to pay a political price China comes to the rescue with loans. That is to say less available credit from European banks could upset the balance of influence and power across Asia and the Pacific. Profitable investing in Asia might become more difficult as Chinese influence increases and transparency decreases. Add the risk of a Chinese real estate crash, decreased Asian exports to Europe, and higher oil prices based on Middle East tension and you have a recipe for potential disaster for the combined economies of the Far East.
Long Term Effects of Shutting off Western Credit to Asia
World trade will fall off measurably Europe buys less from Asia. It will also fall off if Asian producers, at least of now, find less available credit from European banks. However, if European banks cease to be major players in Asia, local banks will pick up the slack. This could result in stronger trade among the nations of Asia and less reliance of trade with the West. That would, in fact, be a healthy thing for China, Japan, Taiwan, Australia, and the rest.
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-Available-Credit-From-European-Banks
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3. As self-imposed austerity measures drive
the Euro Zone back into
recession, economies across the world
worry about less available credit from
European banks.
www.ProfitableInvestingTips.com
4. As the Euro Zone increases its lending limit
again the EU is focusing on keeping its own
economies afloat.
However, the big Euro Zone banks have
traditionally had customers all across the
world.
www.ProfitableInvestingTips.com
5. Clients in Asia, especially, are concerned
that a Euro Zone recession will not only
reduce the European demand for Asian
exports.
A faltering economy in the Euro Zone will
further reduce balance sheets and result in
less available credit from European banks.
www.ProfitableInvestingTips.com
6. Although the combined efforts of the
IMF, European Central Bank, and leaders
of the EU helped avoid a Greek financial
collapse, Spain is now teetering on the brink
of disaster and the continent’s third largest
economy, Italy, is none too healthy.
www.ProfitableInvestingTips.com
7. If worse comes to worst any more low
interest rate loans from the European
Central Bank to ailing European banks may
well come with the stipulation that the
money be lent at home and not abroad.
www.ProfitableInvestingTips.com
9. Will less available credit from European
Banks really damage the economies in Asia?
After all Japan, Taiwan, and mainland China
have large foreign currency reserves. But,
there is no clear indication that the national
treasuries of these and other Asian nations
would open their doors, so to speak, and let
borrowers walk right in.
www.ProfitableInvestingTips.com
10. When the recession and banking crisis hit
in 2008 the effects were devastating to a
large number of borrowers across Asia
and the Pacific.
www.ProfitableInvestingTips.com
11. The large European banks that do business
across the world have relationships with
their clients and are set up to efficiently lend
in time of need.
www.ProfitableInvestingTips.com
12. If this source of funds is cut off Asian
borrowers might find that they have to
pay a political price China comes to the
rescue with loans.
www.ProfitableInvestingTips.com
13. That is to say less available credit from
European banks could upset the balance
of influence and power across Asia and
the Pacific.
www.ProfitableInvestingTips.com
14. Profitable investing in Asia might become
more difficult as Chinese influence
increases and transparency decreases.
www.ProfitableInvestingTips.com
15. Add the risk of a Chinese real estate
crash, decreased Asian exports to
Europe, and higher oil prices based on
Middle East tension and you have a recipe
for potential disaster for the combined
economies of the Far East.
www.ProfitableInvestingTips.com
16. Long Term Effects of Shutting off
Western Credit to Asia
www.ProfitableInvestingTips.com
17. World trade will fall off measurably Europe
buys less from Asia.
It will also fall off if Asian producers, at least
of now, find less available credit from
European banks.
www.ProfitableInvestingTips.com
18. However, if European banks cease to be major
players in Asia, local banks will pick up the
slack.
This could result in stronger trade among the
nations of Asia and less reliance of trade with
the West.
www.ProfitableInvestingTips.com
19. That would, in fact, be a healthy thing for
China, Japan, Taiwan, Australia, and the rest.
Many credit (or blame) the tightening of credit
after 2008 for the fact that China is attempting
to internationalize its currency, the Yuan.
www.ProfitableInvestingTips.com
20. If China succeeds in converting the Yuan
into a reserve currency the roles of
Europe and North America in the affairs
of Asia could well lessen.
www.ProfitableInvestingTips.com
21. However, since banks are in business to
make money it is unlikely that European
or North American banks will retreat
from business in Asia.
www.ProfitableInvestingTips.com
22. It will take more than a weak Chinese
manufacturing report or questionable real
estate market to keep Western banks from
investing in the promise of long term
Asian growth.
www.ProfitableInvestingTips.com
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