Tuesday, May 13, 2008

Credit Agricole-Fench bank Problems

I have never read in my life about bank asking share holders for money.  Well, I guess I did today on BBC.  France's largest bank is in trouble.  Credit Agricole has asked for 5.9bn euros from its shareholder to get it out of a financial crisis.

Will this happen here in the USA?

I am not sure about that, but... with everything going on today with mortgages that were not well written, share holders might have to shell out money or not receive huge dividends.  

I am not against share holder making money, so cutting back on dividends is a bad idea.  It is also bad business to ask share holders for money.  A share holder has already loaned a company money for the right to own a share.  But to ask for more you might as well be selling bonds not share.  

I could be wrong but I don't think so this time.  This French bank is in huge trouble; is this a sign of more trouble to come.

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