Here are the top 10 global banks by their systemic risk rankings,
according to Engle.
Mitsubishi UFJ (Japan): $151 billion
BNP Paribas (France): $134.27 billion
Credit Agricole (France) : $131.3 billion
ING Group (Netherlands): $118.7 billion
Deutsche Bank (Germany): $117.58 billion
Mizuho Financial (Japan): $117.5 billion
Bank of America: $112.3 billion
Barclays PLC (UK): $109.6 billion
Banco Santander (Spain): $106.4 billion
JP Morgan Chase (US): $105.4 billion
What that tells us is very sobering. Systemic risk is alive and
kicking, and it's been living at not just America's biggest banks, but
those of Asia and Europe. You can see that the bank with the highest
SRISK in the world - the one that would need the most money to weather
a crisis - is Japan's Mitsubishi UFJ, with Japan's Mizuho Financial
not far behind. If there's another "Too Big to Fail" book and movie,
it won't be about Tim Geithner storming around the Treasury yelling at
American subordinates; it will have a distinctly international flavor.
But what does this all really mean? The big picture is sobering.
The Ghost of Big Bailouts Past seems to haunting the banking system,
and it's calling up the fellow spirits of the dead - the panic, and
bank runs, and lack of confidence that made the end of 2008 such a
spooky time. Spain and Greece are dealing with issues - depositors
pulling their money out of banks, a chilly bond market - that look
like Bear Stearns and Lehman Brothers in their last days, only dressed
up for a costume party in the Eurozone.
2008 keeps rattling its chains. This week there emerged details about
how Bank of America may have hidden the losses at Merrill Lynch to
speed their November 2008 gunshot wedding. The old 2008 Bailout Crew
- Tim Geithner, Hank Paulson, Ben Bernanke and Neel Kashkari - brought
the old band together again for a reunion tour recently, probably to
talk about how the eurocrisis is making everyone remember the bad old
days of Too Big to Fail. Meanwhile, the beat of "have we learned
nothing?" still goes on at big banks. JP Morgan, one of the most solid
banks in the country, is figuring out if it was hiding its own risks
to indulge a star trader. Morgan Stanley, the weakest of the big banks
that made it through the 2008 crisis, is facing a potentially steep
downgrade by Moody's, which has to do with its heavy load of
derivatives and a steeply dropping stock price that chief executive
James Gorman finds "inexplicable."
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