Too big to fail – a datapoint February 4, 2010 at 9:14 am
Consider a bank which has:
- Non performing loan coverage of only 105%
- Total assets over 65% of its country of incorporation’s GDP
- With that country having unemployment over 15%
- The bank had falling EPS and efficiency ratios in 2009 despite the recovery of the markets
OK, the leverage (assets to shareholder’s equity) is not that silly at 15.5x, but total assets of over a trillion euros are scary big.
Question for the reader: is this bank too big to fail? If so, should it be broken up?
Update. Not even Charles? One more clue: this bank has c. 50% of the UK mortgage market.
