THE TELEGRAPH: Switzerland's top banker has warned of massive losses from the unfolding credit crisis, describing the collapse in US lending standards as "unbelievable".
Jean-Pierre Roth, president of the Swiss National Bank, said market turmoil was far from over as tremors from the sub-prime debacle continued to rock the world.
"We're certainly not at the end of the story. There are question marks surrounding the development of the American economy," he said. "Something unbelievable happened. People who had neither income nor capital got credit with very attractive conditions. Now reality is striking back," he said.
In Germany, the state bank SachsenLB admitted that it had received a €17.3bn bail-out after its investment arm Ormond Quai racked up huge losses on US sub-prime debt. It had previously denied holding direct exposure to sub-prime.
The revelation came as traders braced themselves for another turbulent week, with mounting expectations that central banks may soon cut rates to prevent market mayhem leading to an economic downturn. Traders braced for another torrid week (more) By Ambrose Evans-Pritchard and Yvette Essen
THE TELEGRAPH:
Business comment: Sub-prime crisis is the edge of a financial hurricane (more) By Bernard Connolly
Mark Alexander
