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INVESTMENT BANKING

This article is about Dubai’s faltering finances sent shudders throughout the world, thought the impact was perhaps most felt in London. The London banks were the banks that had loan more money to the emirate. The article says that HSBC, Standard Chartered and Barclays have some of the biggest exposure to the financially strapped emirate. Now, those banks that pulled in millions of dollars in fees financing those ventures may be forced to take billions of dollars in write-downs on those loans. According to the Bank of international Settlements (via Alphaville) foreign banks have more than $ 123 billions of dollars in write-downs on those loans. The article also says that the default is about $ 15 billion, but not all of the emirate federation’s debt face default: much of it belongs to Abu Dhabi, whose oil supplies make it financially stronger. It is unclear whether the banks sold off their loans, distributing them to investors around the world. That may leave others, including smaller banks, hedge funds and private equity firms, in the lurch if Dubai’s investment arms topple.

Actually Dubai’s start over building properties in their own land without thinking of the stability of the world economic, I think that the problem when to far because they knew about the world recession and they ignored the consequences of bad international economic. It doesn’t matter if you have the best of the best properties if the economic is not stable, no reasonable person would buy a property with this kind of economic. Also the banks have some fault, they loan too much money to one area.  Now the banks would have to lose some profits, the only affected would be the private sector. Now all the debt would be dividing between all the investors, the only problem is that some investors had put their live savings in these banks.  I think that is unmoral to take advantage of investors because you want to created in empire without thinking of the consequences.

http://dealbook.blogs.nytimes.com/2009/11/30/british-banks-may-feel-most-pain-if-dubai-defaults/?ref=business

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