ICE's ECON/POP BEING SMALL REL TO BANK BAL SHEETS CAN CUT POSITIVELY

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Number of messages in the thread: 1

1. Date: 2008-10-05 05:03:59
Subject: ICE's ECON/POP BEING SMALL REL TO BANK BAL SHEETS CAN CUT POSITIVELY
From: potatosnketchup <p...@g...com> Search message by this author

The population and economy being dwarfed by the banking portfolio,
which situation owes itself to the previously spectacularly successful
carry trade, is a double-edged sword.

On the positive side, Iceland can use a cure that larger nations
cannot.

They can RAISE RATES OFFERED FOREIGN DEPOSITORS AND SUBSIDIZE DOMESTIC
BORROWERS. CONSIDERING THE SMALL POPULATION, THE LATTER SHOULD
ENGENDER MUCH USING MUCH LESS MONEY THAN THE COST OF COVERING A MAJOR
PORTION THE CURRENT BANK'S LIABILITIES AFTER ALLOWING FOR QUESTIONABLE
DEBTS.

Of course, this plan requires developing a test for who is a bona fide
domestic Icelandic borrower.