Liquidity crisis likely to worsen

09/12/07 - Panmure Gordon & Co

LONDON, September 12 (newratings.com) - Analysts at Panmure Gordon & Co say that the global liquidity crisis is transforming into an insolvency crisis.

In a research note published this morning, the analysts mention that tight financial markets are putting a squeeze on both financial and non-financial firms, although banks are likely to be hit harder. If the tight credit situation continues, it could impact payouts of credit derivatives, which could surpass the the sub prime losses, Panmure Gordon says. The analysts have downgraded their forecasts and price targets for all banks under coverage.