The Great 2007-08 Banking Crisis Quotes

Almost for the first time since the credit crisis began last summer, it was no longer inappropriate to apply the over-used word “unprecedented”. Of course, investors will overdo the gloom in the same way irrational exuberance reigned supreme in the good times.

Lex, FT.com

We had the feeling that there existed a number of incertainties, we have decided to sell.

Michel Tilmant (CEO of ING Group) on the decision to sell ING's stake in ABN-AMRO

These last years, I have often observed with disbelief the abnormally high price of shares and the profits generated by the banks.  I have asked myself what the underlying reason was...

Michel Tilmant

I have learnt something being a banker: it's always those that have an opinion that lose money.

Michel Tilmant

History has not dealt kindly with the aftermath of protracted periods of low risk premiums. 

Alan Greenspan 

This is what Garcia Marquez called "tale of a death foretold". 

Bad lending and a bubble in asset prices. On top of that "mark to market" rules are a poison pill.

First banks should provide only for the part of their loans that they might lose- as they did 50 years ago. That part should be debited to profit and loss. The shortfall in capital resulting should be raised from existing shareholders, or lent to these by the deposit insurance funds, acting for the Treasury. Depositors should be reminded that deposit insurance covers their deposit up to a certain amount. Lenders can be allowed to take time to repay- i.e be refinanced/rolled over. That is all you you need, and is mainly a restatement of the old old rules. None of this panicking by politicians. Their remedies are impossible to understand anyway and use more money than exists. In ten years it will all be over. Such crises usually cost 12% of GDP and and with a profit for the government as they sell the bank shares off.And bubble prices fall, e.g. UK houses, which is good.

From Economist.com, Opinion, Blocked Pipes, Reader 'davidhutchison' commenting