It turns out that many European banks are facing write downs due to bad loans to the shipping industry:
Banks with large shipping industry portfolios — among them Royal Bank of Scotland and Lloyds, and HSH Nordbank and Commerzbank in Germany — could face meaningful write-downs as ship owners confront plummeting charter rates from a 25 percent drop in global trade.One analyst says:
“We estimate that there will be a 50 percent oversupply in container ships,” Mr. Brahde said. “And in the next five or six months you will see more banks repossessing ships. It is not life or death, but for those with real exposure there will be problems.”I'm not exactly sure of the point of repossessing a container ship if, as the article suggests, a large oversupply will mean there is not much of a market in used vessels. But what do I know.
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