(V): "I would have thought the fines and that a class action is to take place would have been news worthy"

I'm not a banker, so news about banks doesn't exactly float my boat. Besides, you have a worse banking problem to worry over in your own neck of the woods...


Insurance giant’s move follows Siemens’ decision to remove E500m from Societe Generale
LAST UPDATED AT 16:31 ON Wed 21 Sep 2011
WHAT HAPPENED?
The insurance market Lloyd's of London has followed in the footsteps of other large institutions and pulled its deposits from some European banks, concerned at their ability to weather the deepening debt crisis gripping the eurozone.

Finance director Luke Savage told Bloomberg: "If you're worried the government itself might be at risk, then you're certainly worried the banks could be taken down with them.

"We have a very conservatively positioned balance sheet," Savage said, noting that Lloyd's holds around £800m of its assets in cash, which it has stopped depositing with banks in Europe's peripheral economies, though he declined to name the countries or banks.

WHAT DOES IT MEAN?
The Lloyd's announcement follows yesterday's news that German engineering giant Siemens had removed €500m from the French bank Societe Generale two weeks ago and placed the money in a European Central Bank (ECB) account, apparently alarmed by the financial health of SocGen going forward.

As panic increases within European financial circles at the prospect of a Greek default, which could see banks across the continent lose billions of euros, companies which use these banks to hold their short-term deposits are growing increasingly concerned that they could lose their money should a bank go to the wall.

Certain large companies such as Siemens which also operate their own banks are allowed to deposit money with the ECB - the German industrial group now has between €4bn and €6bn with the bank.

WHAT NEXT?
If more institutions follow the lead of Lloyd's and Siemens and begin to remove their money from banks across Europe, those lenders will have fewer funds to fall back on in the event of a Greek default.

Such a shock would soon transmit itself across the world economy, and would see the current debt crisis transform into a global event as banks stop lending to one another.



Why does anyone bother reading this crap? It's depressing.