GFC II on its way

From The Sydney Morning Herald:

OUTGOING Commonwealth Bank chief executive Ralph Norris has warned that the European debt crisis has entered a dangerous phase, likening the current turmoil to the global financial crisis of three years ago.

Mr Norris said global money markets ''effectively froze'' this week as Germany failed to sell the entire stock of €6 billion ($8.2 billion) worth of long-term bonds.

His comments came as the leaders of the euro zone's key economies, France, Germany and Italy, met in France overnight to resolve differences over how to handle Europe's debt crisis.

But Mr Norris, who retires next Wednesday after more than six years in the role, cautioned that credit-crunch conditions were returning, which is threatening to choke off funding for banks around the world.

''This has potential to be significantly worse than the Lehman Brothers collapse and the subprime crisis because now we are talking about nation states,'' Mr Norris told BusinessDay.

''If you have a situation like you had today, where markets had effectively frozen, then it doesn't matter how good your name is, you are not going to be able to access markets,'' Mr Norris said. ''As of today, no banks could access these markets.''

Read more: http://www.smh.com.au/business/gfc-ii-on-its-way-norris-20111124-1nwx1.html#ixzz1egJjCsKg