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|
|4||HSBC Holdings plc||2,354,266|
|5||BNP Paribas Group||2,321,170|
|6||Credit Agricole, S.A.||2,110,771|
|8||ING Groep N.V.||1,797,959|
|10||UniCredito Italiano Group||1,399,668|
|12||Banco Santander Central Hispano S.A.||1,250,568|
|14||Credit Suisse Group||1,133,503|
|17||Lloyds TSB Group plc||707,086|
|22||DZ BANK AG||590,873|