Is ‘overbanked’ going to be a common household word?
Via The Big Picture and Ritholz comes Nervousness in over banked Europe
Go no further than the following two charts to understand why markets freaked out over Dijsselbloem’s comments. Europe is way overbanked and vulnerable to financial sector shocks.
Even in the so-called “safe haven” Switzerland the banking system is outsized relative to the country’s GDP. Compare the relative size of UBS, for example, to the largest bank in the U.S., JP Morgan. Nuff said.
And where did all this dough come from you ask? Debt accumulation at the personal level that has never been seen in the history of mankind.
What are they so scared of. Isn’t this all just based on “nominal” numbers and the real money involved is much less?
At least that was one of the stories in the not so distant past regarding banking.
Or is it that those who turned the fictional nominal into hard savings are now concerned that screwing the bank to turn the nominal into hard savings is going to make their hard savings evaporate?