Entries categorized as ‘bank assets’
http://www.thisislondon.co.uk/standard/article-23523323-details/Profit+crash+rocks+banks/article.do
The news hit London on July 30th that one of the most conservative of the British major banking institutions saw its profits plunge by 70%. “The result was far worse than a pessimistic City was expecting and raised fears for high street rivals. HBOS, which owns Halifax, reports tomorrow and Alliance & Leicester the day after. Lloyds TSB blamed the global credit crunch and losses in its insurance business. The figures will heighten government fears that more small banks could collapse such as Northern Rock. Lloyds was regarded as the most conservative of the big banks and had won praise for resisting the temptation to make risky loans during the boom years.”
Categories: Anglo-Saxon free trade · Lloyds · bank assets · bank capitalization · bank earnings · bank failure · bank failures · bank insolvency · bank lending · bank nationalization · bank reserves · bank run · banking crisis · banking system · banks
The latest from Satyajit Das analyzes the question of where bank earnings will likely go from here. It’s a thoughtful and well reasoned piece. His conclusion:
“Glamorous banks reliant on “voodoo banking” may find it difficult to achieve the high performance of the “go-go” years. Banks with sound traditional franchises that have avoided the worst excesses of the last 10-15 years will do well in the changed market environment. Such old fashioned banking may ironically do well in the “new” environment. Interest rates that they charge customers have increased. Bank deposits have become far more attractive than other investments. Stronger banks have also benefited from a “flight to quality”.
Will the recovery in bank stocks take the form of “V” or “U”? It may be a “L”. With the Northern Rock and Bear Stearns bailouts, central banks and governments have signaled that major banks are “too big to fail”. This is a necessary but not sufficient condition for recovery of bank earnings and stock prices. The recovery might take the form of a “L” (Kirsten ITC font) – note the small upturn at the far right of the flat bottom.”
Read the entire article: http://www.eurointelligence.com/article.581+M51e05e0377e.0.html
Categories: Das · Satyajit Das · bank assets · bank capitalization · bank earnings · bank failure · bank failures · bank insolvency · bank reserves · banking system · earnings forecast · financial sector · financial sector earnings · healthy banks · safe banks · shape of recovery
Despite some variation, average ratio of high risk assets to equity was 188% across these major banks:
Many thanks to Russ Winter for chart and graphic!
Categories: Economy · bank assets · bank capitalization · bank failure · bank failures · bank insolvency · bank reserves · bank safe · banking crisis · banking system · banks · collateral · financial sector
For curiosity’s sake, take a look at the historical dollar amount of borrowing by depository institutions (banks) from the Federal Reserve. It is hard not to notice that what we have here is unprecedented over the last 100 years. When you hear someone say the credit crisis is almost over, check this chart and think again.
Total Borrowings of Depository Institutions from Fed. Reserve 1910 – present (Billions $US)
Categories: Fed · NY Fed · Treasuries · bank assets · bank capitalization · bank failure · bank failures · bank insolvency · bank nationalization · bank reserves · bank safe · banking crisis · banking system · demand deposits · federal reserve · nonborrowed reserves · reserve requirements · reserves · socializing losses · state owned banks · subprime · what inning are we in
Germany’s Federal Financial Services Authority is known as BaFin. According to information obtained by SPIEGEL, an internal BaFin report says that shortfalls at finance institutions worldwide could end up totalling $600 billion (€380 billion). The shortfall comes as a result of ill-advised speculation on the US subprime market and resulting jitters in markets worldwide. BaFin says that its prognosis is merely a worst-case scenario. “Given what we know about the current situation on the markets, we presume that a total of $430 billion is more probable,” the 16-page report says. (more…)
Categories: BaFin · German economy · Germany · bailout · bank assets · bank failures · bank insolvency · bank reserves · banking crisis · banking system · effect on pension plans · effect on pensions · global financial markets
Click on the thumbnail and weep. This chart is the latest, and was updated as of 2/22/08. It’s dramatic. ↓
Now click on this thumbnail to see latest (as of 2/15/08) Fed chart for banks’ total borrowings from the Federal Reserve - without precedent it would seem. ↓
For an excellent discussion of the meaning of all of this, check out “Borrowed Reserves and Tinfoil Hats” from Mish’s blog: http://globaleconomicanalysis.blogspot.com/2008/02/borrowed-reserves-and-tin-foil-hats.html
Categories: Fed · bank assets · bank failures · bank insolvency · bank nationalization · deposit insurance · federal reserve · nonborrowed reserves
Digested version: bankers ignorant, reckless. The Treasury committee of the Parliament has now issued its report after hearings conducted in 2007. Readers’ Digest version: bankers and credit rating agencies were ignorant, reckless. As reported by the Telegraph, today’s report says that banks had not understood the financial products they were buying and selling. “The committee singled out Lord Aldington, chairman of the Deutsche Bank’s London branch, who declined to explain the difference between a CDO and a CDO-squared when he appeared before them.” The committee also lambasted the credit rating agencies for not responding earlier to the crisis in the US sub-prime mortgage market, and for alarming investors by making large downgrades at the height of the crisis. Read the full report (pdf) here:
parliamentbanks0308.pdf
Categories: Northern Rock · Parliament · bank assets · bank failures · bank insolvency · banking system · bond insurer · monolines
RECORD HIGH: Arab bank assets to hit $2 trillion this year. (Getty Images)
Arab bank assets for the first time top $2 trillion at the end of December 2007 as Middle East and North African economies expand, and the banks lender more, the Union of Arab Banks said.
Combined, lenders from Morocco to Oman are likely to post a 25% increase in profit this year to $32 billion, Adnan Yousif, chairman of the union, told reporters in Dubai on Wednesday.
“The banks are doing very well because of liquidity, and the growth and expansion of economies,” said Yousif. “You have to have cash for this.” The union, whose members include 400 financial institutions, coordinates activities between Arab financial services firms and acts as a consultant to the industry. (Reuters)
Categories: Economy · Gulf States · arab bank · bank assets · bank reserves · banks · global financial markets · islamic finance
