‘Second wave’ of bank losses expected
22 September 2008
A credit reference agency have said that US and European banks will suffer a ‘second wave’ of massive losses from the credit crunch in the next few months.
The report by Standard and Poor’s said that banks will be forced to write off billions of pounds in additional losses as the economic outlook deteriorates. In particular, they said, further losses in the American mortgage market will leave many banks struggling.
The news threatens to put extra pressure on the mortgage market, with many would-be and existing homeowners facing a potentially much more difficult and expensive market.
The mortgage market in the UK has recently enjoyed a slight fall in interest rates and mortgage arrangement fees, but the Standard and Poor’s report indicates that this may be short lived.
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