Sovereign wealth funds have poured billions of dollars into ailing western banks in the past three years, but the chequered record of those investments leaves doubt about their willingness to support a new wave of bank re-privatisations. Asa Fitch and Gregor Stuart Hunter report
At the height of the credit crunch in 2007, rising defaults on sub-prime mortgages forced big western banks to raise capital from large investors who were not looking for a quick profit.
Back then, banks were still wary of government assistance, so they found help from what were the world's only large-scale investors who fitted the bill: sovereign wealth funds. For the funds, the investments presented golden opportunities to get a slice of the lucrative global banking pie.
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