Business: Assessing Dubai's Debt Crisis - nytimes.com/video
The New York Times
Transcript
shares on Wall Street fluctuated Monday as investors tried to figure out the meaning of the financial crisis in Dubai Dubai World the investment arm of the Emirate announced last week that it would like to delay repayment of almost $60 billion in debt on Sunday the Central Bank of the United Arab Emirates tried to reinsure investors by pledging to make extra financing available to all banks in the country but but the question now is how far reaching can this crisis be and can the UAE provide the capital that might be needed Graham boy is working on the story Graham the markets are calm today so far so investors seem not overly worried about the situation in Dubai um are they right not to be overly worried I think they're assessing the situation they were assured reassured Yesterday by uh what the Central Bank in the UAE did it said it was going to guarantee and stand behind Banks operating in Dubai so that kind of really kind of gave some confidence and markets open today calmly but they still don't know a lot of things they don't know the total amount of debt that might be a risk here we have figures bouncing around we don't know exactly what liabilities Dubai world has um what is what let me ask you what is the latest word out of Dubai on that well today we had the Ministry of Finance of Dubai really distancing itself from Dubai World you know the central bank said it was going to back Banks but what about companies we don't know about that and today the Ministry of Finance saying uh it's not our problem so that caused some Jitters in the it makes it a little less clear exactly how far they're going to go what what um what how how do we find out what other Banks what other companies might be affected by this situation I mean is that's what you're working on I know today but you know where can the where might the thread lead well there's the initial question of who is exposed to Dubai so who holds Dubai's debt and that's already been reflected in the markets we're seeing that sort of HSBC standard charted you know the British system pretty exposed lots of lots of loans to Dubai they're already taking a hit if there's more debt we don't know about from Dubai in particular that might leave other places vulnerable but then there's a bigger question which is a story we're working on today which is is there a sort of a broader reassessment going on here of risk and of Emerging Markets so just step away from Dubai and look around at other problem places such as what what might be a problem well there might be a problem you know Greece um Ireland these are heavily indebted countries built up big debts during the crisis increasingly short-term debts so they're going to have sort of financing problems Com or tests at least coming forward um and they might be vulnerable so they and themselves are vulnerable and people who are exposed to them will be vulnerable as well so we're just trying to look around the world and and sort of gauge what might be the weak links gram thank you so much