Bank Exposure

Hasschu

A graphic from Societe Generale on the exposure of German, French, Swiss and UK banks to Ireland, Spain, Portugal and Greece. The creditors are now known by the acronym F-UK-DE, rather apt. Ireland is operating way above its weight, a lot of sleepless nights for European bankers.

http://3.bp.blogspot.com/_ngczZkrw340/S4peBlycTrI/AAAAAAAAQVw/leWLGSaP16M/s1600-h/Europe%27s+Exposure+to+Peripheral+Banks.png

BESman

Alarming amount of exposure for a relatively small banking system. What the hell were they doing.

Cunsiderthis

BESman wrote: »

Alarming amount of exposure for a relatively small banking system. What the hell were they doing.

Although I am not sure I understand the graph, what irish banks were doing was pretending that land was accurately valued at +-€300 000 000 per acre, and lending money on the strength of that.

Unfortunately we have learned since that land is not worth +-€300 000 000 per acre, and we have also learned that the security of the land against the loan is really not worth much. So the banks have assets worth, perhaps, €30 million against which they have given loans of, perhaps, €250 million.

Hence most of our banks are bankrupt.