Bank crisis for prostitutes
Credit is still tight despite the low Libor rates and other signs that market stress has died down. Case and point is an item I ran across on the Norwegian site E24. Apparently, Amsterdam is losing revenue as its prostitutes in the red light district cannot get credit. Here is my translation of the story:
The City Council in Amsterdam is turning its attention to a pressing problem. One of the city’s key industries is struggling to obtain credit and banking. And it will now take elected officials to clear things up, reports Reuters.
The city’s red light district is known for women which lure customers through tiny windows with even tinier clothing. But despite the activities being completely legal, many banks do not want these women as customers.
The City Council will put an end to this. As part of a facelift for the De Wallen neighborhood, which also includes the red light district, the City Council has been asked to help bordello owners and employees to make banking connections more accessible.
Over the course of two months, a solution will be put in place that can help the industry. But the City Council will not establish or sponsor a separate sex bank, as reported by a local newspaper.
It’s a somewhat amusing little story, but the overall point is clear. Credit is still restrictive the world over and that means deleveraging is still continuing apace.