This West LB story could turn out to be a big one and the ramifications for EUR/GBP could be exactly the opposite of what I have outlined in my first post.
I started my career with WestLB back in the mid-80s and I have followed their ‘progress’ with interest over the years. They became a huge player in the UK property market from the mid 1990s and somehow managed to lose vast sums of money and they still have some very significant exposure. That is why the talk of them having perhaps to off-load ‘non-core’ assets might in fact be bullish EUR/GBP in the medium to long term. If West-LB have to sell UK property interests then they will have to repatriate these funds.
So the short term sentiment will undoubtedly be bearish but the longer term impact on pairs like EUR/GBP might turn out to be bullish.
