The depth of the European banking crisis
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There are several indicators which underline the seriousness of the financial situation in Europe. The European Banking Association recently called for banks to have 200 billion Euros extra in their reserves. Obtaining this capital without government help would have been impossible, but many of the governments concerned have grave sovereign debt issues.
At Cooper Matthews, we appreciate that the British economy is not isolated from international economic turmoil. Although some of the economic problems of the UK are home-grown, many of them are connected with unfortunate developments abroad. The first recession was linked with difficulties with the subprime mortgages in the United States, while this phase of the crisis is being exacerbated by the ineffective arrangements at the heart of the Euro zone.
If the British economic recovery is in part reliant on external policymaking and international markets, many individual firms are being buffeted by events far outside their control. The British consumer is often unable or unwilling to spend at the moment. Consumers are being hit by a storm of inflation and unemployment. Those fortunate enough to have a good job are having their savings eroded. In addition, the pervasive negativity about the world economy on the news is inhibiting spending.
In these awkward circumstances, business debt can become hard to handle. It is hard to keep up with repayments when reasonable expectations have not been met. If sales are much lower than was anticipated, then it can be hard to know what to do. If debt repayments cannot be coped with, using business debt services may be of assistance.
Sometimes business debt services cannot prevent a firm from being unable to satisfy its creditors. Even in this scenario, it is sometimes possible to do something positive with the assets of the firm. If the correct procedures are followed, a phoenix company may be set up in some instances. |
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Author Resource:-
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By :
Rutland Savour
Submitted
2011-11-15 20:51:34 |
Article From Article Mayhem
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