The Bankwatch

Tracking the consumer evolution of financial services

We are all Sisyphus

Tett uses Greek metaphors to describe the task G20  and the world needs to realise in terms of the size of the task. Sisyphus was a king sentenced to the punishment of pushing a stone uphill, only to watch it roll back down, and having to repeat the process.

As announcements and estimates of the bad debt problem have appeared, the accompanying fix has been drowned out by every new and escalating estimates.  This is the core of the banking crisis that must be addressed, by multiple strategies.

In this case I believe that the average person is represented Sisyphus, being condemned to watch that stone come back down the hill forever it seems. 

The best hope so far is the co-ordination that is taking shape post G20 yesterday.  Time will tell.

A Sisyphean task fit for Herculean policymakers | FT

Yet the rub is that until a credible number appears, it will be painfully hard to end the current banking mess.

Yet the grim fact remains that, a full year after the International Monetary Fund first caused "shock" by predicting $1,000bn of credit losses, the IMF has now doubled that tally to $2,200bn.

That is more than 20 times bigger than the US government’s first estimate of the likely credit losses, back in the summer of 2007.

Yet the gossip is that the IMF estimate is poised to jump even higher soon. That is just one more reminder – if any were needed – that the G20 now needs to display some truly Herculean vision and strength.

Technorati Tags:

Written by Colin Henderson

April 3, 2009 at 13:05

Posted in Uncategorized

2 Responses

Subscribe to comments with RSS.

  1. It does seem to me that bailing out banks is the last thing any responsible government should be doing. If they spent equivalent amounts of money supporting ‘ordinary’ people who have lost money through the actions of the banks, the money would get back into circulation, house prices would stop falling, and only a few bankers (who caused the problems in the first place) would ‘suffer’ a reduction in their fortunes.

    Isn’t it time we found a better way to handle money?

    Marilyn Mehlmann

    April 4, 2009 at 08:02

  2. @Marilyn – I don’t disagree about a new way to handle money. the key about the bailouts though is that they ought to accompany firing of management, and owners of the bank (stockholders) lose their money. The latter has already happened. No banker is ‘in the money’ on their options anymore so they are worthless.


    April 5, 2009 at 17:46

Comments are closed.

%d bloggers like this: