Yalman Onaran 
Zombie Banks 
How Broken Banks and Debtor Nations Are Crippling the Global Economy

An in-depth look at the problems surrounding zombie banks and
their dangerous effect on the global economy

‘The title is worthy of a B movie, but it’s also apt.
Bloomberg News reporter Yalman Onaran, supported by former U.S.
Federal Deposit Insurance Corp. chief Sheila Bair – who provides a
foreword and numerous interviews – urge that insolvent banks both
small and too big to fail be allowed to do precisely that.
Reading bank balance sheets is not everyone’s idea of a good
time. But Mr. Onaran, with support from Ms. Bair, does the chore
and explains what it means. Mr. Onaran shows that the process
of rescuing dead and dying banks is increasing systemic risk in the
global banking system. And that is really more frightening than
scream flicks from Tinseltown.’ — Financial
Post

‘Yalman Onaran knows of putrid financial institutions,
having written about them in his native Turkey so successfully he
brought down a few in Istanbul in the late ’90’s.’ —
Huffington Post

‘Do We Love Zombie Banks? The new book by Yalman Onaran of
Bloomberg News, Zombie Banks: How Broken Banks and Debtor
Nations Are Crippling the Global Economy, is a well-organized
and clearly written discussion of the use of leverage to provide
growth in many different economies. Onaran has carefully researched
the zombie phenomenon and makes some important points in this
concise volume about both public policy and the concerns of
investors. One of the more interesting early threads in the book is
the juxtaposition of the experience of the US in the S&L crisis
and Japan in the 1980s and 1990s with the US today. Zombie
Banks is a good review of the latest thinking about the ebb and
flow of the political economy.’ — R. Christopher
Whalen, author of Inflated

Zombie banking has become standard operating procedure for big
debtor nations. They prop up failing institutions, print money, and
avoid financial corrections. But in an attempt to prolong the
inevitable, bigger problems are created. The approach used now has
not, and will not, work. This timely book reveals why. Zombie
Banks tells the story of how debtor nations and failing
institutions are damaging the long-term prospects of the global
economy.

Author Yalman Onaran, a veteran Bloomberg News reporter and
financial banking sector expert, examines exactly what a zombie
bank is and why they are kept alive. He also discusses how they
hurt economic recovery and what needs to be done in order to
restore stability. Along the way, Onaran takes an honest look at
how we arrived at this point and details the harsh realities that
must be faced, and the serious steps that must be taken, in order
to get things headed in the right direction.

* Puts insolvent banks and debtor nations in the spotlight and
examines how they are crippling the global economy

* On the record sources include Paul Volcker, Joseph Stiglitz,
Sheila Bair, and many more bank executives, regulators,
politicians, and policymakers in the United States and abroad

* Takes the complexity of the current situation and translates it
in a way that makes it understandable

While the short-term measures taken to stave off depression and
rejuvenate economic growth may offer hope, they are unsustainable
over the long term. Get a better look at what really lies ahead,
and what it will take to improve our economic situation, with this
book.

Table of Content

Foreword ix

Preface xi

Cast of Characters xv

Chapter 1 Zombies in Our Midst 1

Chapter 2 Lessons Not Learned 15

Chapter 3 Europe’s Sovereign Blues 23

Chapter 4 Germany’s Untouchable Zombies 35

Chapter 5 Ireland’s Zombies Bring the House Down
51

Chapter 6 The Reincarnation of Iceland’s Banks
67

Chapter 7 U.S. Zombies on IV Drip 81

Chapter 8 The Fight to Rein in the Banks 97

Chapter 9 To Foreclose or Not to Foreclose? 113

Chapter 10 Bigger Banks, More Derivatives, Higher Risk
125

Chapter 11 Killing Zombies and Preventing Their Return
137

Epilogue 149

Notes 157

About the Author 175

Index 177

About the author

Yalman Onaran is a veteran financial reporter at Bloomberg News and has studied bank insolvency for decades. One of the first reporters to break the news of the collapse of Lehman Brothers and Bear Stearns, he also opened the Istanbul bureau of Bloomberg News and exposed thirteen insolvent Turkish banks which the government was allowing to continue to operate. Onaran’s work has appeared in the New York Times, Washington Post, Chicago Tribune, Bloomberg, Businessweek, Frankfurter Allgemeine Zeitung, and numerous other news outlets around the world.