Just a few hours ago, I posted an article about European toxic asset exposure based on a Telegraph article.  The crux of the Telegraph piece was that European banks have a shed load of bad debt on their books.  A secret European Commission document allegedly put the exposure of the European banks to ‘toxic’ assets at £16.3 trillion, which is reported to represent 44% of total European bank assets (this equates to a total asset base of $53 trillion assuming an exchange rate of 1.4355 for GDP/USD).  Leaving aside the question of just what qualifies as a dodgy or toxic credit, it bears understanding just how large (and leveraged) European banks are.

Below is a list of the largest European banks by assets at the end of 2007.  You should notice RBS is so large in relation to the UK economy that one wonders how the mergers which formed the enterprise were allowed to take place (Wikipedia puts British GDP at $2.78 trillion versus the $3.8 trillion in assets at RBS).  I use RBS as an example of the egregious nature of asset growth at European banks, but they are merely the largest of many such behemoths.  The aggregate total assets of the 23 banks on this list is $33 trillion.

1	Royal Bank of Scotland Group PLC	3,801,038
2	Deutsche Bank AG	2,767,123
3	Barclays PLC	2,455,166
4	HSBC Holdings plc	2,354,266
5	BNP Paribas Group	2,321,170
6	Credit Agricole, S.A.	2,110,771
7	UBS AG	1,893,153
8	ING Groep N.V.	1,797,959
9	Société Générale	1,468,167
10	UniCredito Italiano Group	1,399,668
11	HBOS plc	1,333,894
12	Banco Santander Central Hispano S.A.	1,250,568
13	Fortis	1,193,151
14	Credit Suisse Group	1,133,503
15	Commerzbank AG	844,485
16	Dexia Group	828,170
17	Lloyds TSB Group plc	707,086
18	BBVA	687,951
19	Danske Bank	615,168
20	Landesbank Baden-Württemberg	607,430
21	Dresdner Bank AG	595,160
22	DZ BANK AG	590,873
23	Bayerische Landesbank	569,368

Sources
United Kingdom – Wikipedia
European bank bail-out could push EU into crisis – Telegraph
Top 25 European Banks – Data Monitor
Benchmark Currency Rates – Bloomberg