TBTF Euro Banks

IMF Sees European Banks Facing $4.5 Trillion Sell-Off – Bloomberg.

People talk about America’s banks being too big to fail, but look at this chart and tell me where the TBTF banks really are. The first US bank, BoA, appears 27th on this chart.

If you were wondering why the ECB has been lowering collateral requirements and handing out cheap loans, this chart reveals the reason.

For example, the two largest French banks have assets exceeding 150% of French GDP. France can simply not afford to bail out one let alone both of them. Unfortunately, a double failure scenario is not farfetched. These banks have done a lot of cross-border business and are loaded up with PIIGS assets.

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3 thoughts on “TBTF Euro Banks

    • David, I remember reading that the European banks are as leveraged as their American counterparts on the eve of the GFC. 40/1 is a good guess.

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