European Versus US Bank Leverage
There’s a lot of talk about leverage so here’s a comparison of assets versus equity. Assets are from end of financial year, and they don’t account for any deleverage or merger activity, such as JPMorgan and Bear Stearns. Equity is, I believe, up to date and includes rights issues, etcetera…
|Bank of America
Note the three big US banks have balance sheets that represent 40% of US GDP. Now let’s take a look at European banks.
Clearly leverage levels in Europe and the UK are markedly higher. More staggering is the size of the balance sheets. Deutsche Bank’s is almost as big as those of Bank of America and JPMorgan combined. And yet, amazingly, the bailout and other US actions make the current situation look like it’s a US problem.