Authorization

A bail-out for IL&FS raises wider worries about non-bank lenders

CAN a big financial firms credit rating fall from AAA one monthgood enough for pension funds and life insurersto junk the next without causing a crash? Indias government decided it did not want to find out. Last week it granted Infrastructure Leasing and Financial Services (IL&FS), one of Indias biggest shadow banks, a parachute. Plenty are worrying that it will not be enough.As recently as early September, IL&FS raised few concerns. A couple of weeks later it had defaulted on several payments to creditors. By the end of the month it had said it would raise 45bn rupees ($630m) of fresh capital through a rights issue from its owners, including the Life Insurance Corporation of India, a state-owned insurer. On October 1st the government forced out the board and appointed a new one. It was, in effect, a shadow-bank bail-out.
See also:
Leave a comment
News
  • Latest
  • Read
  • Commented
Calendar Content
«     2019    »
 123
45678910
11121314151617
18192021222324
252627282930