European Banks haven't faced the music

[Slimprofits]

While U.S. banks have already written down about half the estimated $1.1 trillion in troubled loans and toxic assets on their books, Europe's financial institutions have thus far written down less than 25 percent of their $1.4 trillion in bad debts related to the crisis, according to a report from the International Monetary Fund. Many major Western European banks are also heavily invested in hard-hit Eastern Europe, where the risk of a fresh wave of corporate and consumer defaults is considerable.

The source of that paragraph is this article in the WaPo: http://www.washingtonpost.com/wp-dyn...052203230.html


For the data tables, turn to page 35 of the IMF Global Financial Stability Report released in April:

http://www.imf.org/external/pubs/ft/...1/pdf/text.pdf

[Slimprofits]

Re: European Banks haven't faced the music

This is just a semi-educated observation, but maybe the USDX continues to trade within the range of 80-89 as bad news continues to travel from one side of the Atlantic to the other during the short-term. That is, until another major currency event.

[c1ue]

Re: European Banks haven't faced the music

It is true that the US banks have written off more.

But that is because they HAVE to.

The European banks are faced with large losses but they are largely capped: i.e. the losses are not going to grow over time.

This applies both to their foolish purchases of MBS's as well as the Eastern European debt.

The US banks on the other hand are faced with uncapped losses: As the housing market continues to fall, the losses being realized are growing.

Sure, both are in a bad situation. But I'd rather be capped than not.