18 août 2011 11

ECB: no more bets!

Rédigé par jp-chevallier dans la rubrique Banques Européennes, English

The situation is out of control in the euro zone, as I have been writing it for a while… The latest ECB press release ended Aug. 12 showed that the interbank market does not work: bank deposits increased by €71 billion in the week to reach €441.5 billion (liability item 2) …! Document 1: Euro-zone [...]

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17 août 2011 9

Leverage: reality and Accounting

Rédigé par jp-chevallier dans la rubrique Banques Européennes, Banques américaines, English

For over 5,000 years, by definition, the bankers lend money they do not have but that they have previously borrowed. To be able to borrow money to lend, trust must exist between the partners. For this, the bankers should have plenty of capital. This is necessary, unavoidable. For millennia, the bankers could not lend much [...]

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16 août 2011 12

French Gosbank: tsunami risk!

Rédigé par jp-chevallier dans la rubrique Banques Européennes, Banques américaines, English

The four French Gosbanks have €5.645 trillion of liabilities. That is 2.8 times French GDP (€1.986 trillion). Table 1: Amounts in billion of euros. Their shareholder’s equity is only €210 billion. Their leverage average is at 26.8 (i.e. a Tier 1 ratio at 3.7%), worse than Lehman Brothers before its bankruptcy (25). To have leverage [...]

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15 août 2011 15

BNP Paribas leveraged: 27!

Rédigé par jp-chevallier dans la rubrique Banques françaises, English

The real leverage of BNP Paribas is … 27.2! Indeed, the French bank counts in its equity item 2: Undated Super Subordinated Notes eligible as Tier 1 capital which are actually a form of liabilities related interests subject to some conditions. Document 1 (top of page): Document 2 (bottom of page): Equity published in item [...]

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14 août 2011 21

Société Générale leveraged: 50!

Rédigé par jp-chevallier dans la rubrique Banques françaises, English

The real leverage of Société Générale is… 50! Document 1: Indeed, the French bank counts in its equity item 2: Equity instruments and associated reserves which are actually different forms of liabilities related interests subject to some conditions. Equity published in item 1: Sub-total equity, Group share should be reduced by Equity instruments and associated [...]

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