Monday, August 24, 2009

European financial institutions have outstanding debt near or exceeding respective countries' GDP

People think the U.S. financial sector is strung out on debt, however, it pales in comparison to Europe. Below are the ratios of European Financial Institutions' international debt (most of that in dollars) as a % of their respective countries' GDP.

Germany 85.4%
France 59.0%
Spain 105.9%
U.S. 35.7%

German banks and financial institutions have debt that is 85% of Germany's GDP. Spain's banks have outstanding debt that is 106% of Spain's GDP. France's banks have debt that is nearly 60% of that countries' GDP. American financial institutions have debt that is only about 36% of U.S. GDP.

If the Fed hadn't come to Europe's rescue with those massive dollar swap lines seen last year and earlier this year, the entire Euro monetary system would have come apart. It may still happen because the Fed has been sharply criticized for those loans, making it questionable whether or not they will do it again if things start coming apart in Europe.


googleheim said...

saving the eu

is just part of our

"krass" kenysian economics

Vince Rowe should hang it up on Bizradio with his "austrian" superiorism BS

we are subidizing the EU ?

their healthcare

and what do we get ?

tax payer on the hook lies

mike norman said...

Yes, Goog, you got it!

googleheim said...

spike the dollar !