Private Bank Debt higher than GDP
by Benjamin on February 2, 2009
Now here’s some statistics which should be cause for concern…The G10 country doing the best in terms of banking liabilities as a percentage of GDP is the U.S….. with only a hundred odd percent of liabilities. That is the best performer, and that is after all the bail-out fun!
Belgium, Ireland, Switzerland, the Netherlands and the UK all have more than 3 times their GDP in private bank liabilities. Unsure where this might lead to, it is at least better than the original figure which put Ireland at a staggering 800% liabilities to GDP – although it turned out that Dresdner Kleinwort – the German consulting company – who had originally composed the chart had fallen prey to a bit of global risk themselves as they corrected the graphs with the comment
“I’m afraid to say, It looks like our outsourcing guys in Manila used the wrong exchange rate in compiling the data for Ireland. I’ve re-checked the figures and the number for Ireland is 368%.” (Financial Times)
Ignoring Manila’s fun at the FT’s expense, this calculation doesn’t start to count the government deficits or trade deficits, so with that is mind the picture is even less cheerful. An interesting question is of course whether the G10 countries have always been this heavily leveraged?
This via Turbulence Ahead and Stephen Kinsella‘s blog.
Tags: Bank, Credit Crunch, Financial Crisis, GDP, Liability
