Friday, Apr 18, 2008
Swiss banks biggest losses
Spiegel: Swiss banks suffer the most
(in german I'm afraid)
Analysis from Peter Dixon of commerzbank in London
- essentially says that following countries/banks have following percentages of global "known" writedowns so far:
USA (47 %)
Swiss (17 %)
German (15 %)
British (5%)
In relation to corporate size, Swiss banks have lost the most.40% of their book value.
According to report UK banks will be badly affected by any downturn in property.
Or as also seems likely to me, we are only beginning to see UK banks reporting any kinds of losses.
Posted by mken @ 02:20 PM (414 views) Add Comment
8 Comments
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1. Rental John said...
Subprime ist defekt
2. seanb303 said...
good article
mken are you german?
i'm british but grew up in germany(bremen)
germany has got the right idea when it comes to btl , our goverment could learn a thing or two
3. This comment has been removed as it was found to be in breach of our Blog Policies.
4. uncle tom said...
I can see both technical and cultural reasons why the UK banks may be less exposed to the US dodgy paper than those on the continent - but I can't be sure!
Losses due to consumer debt write-down, both secured and unsecured, will be far worse in the UK than either Germany or Switzerland.
I have a strong suspicion that the cheap credit era that has fuelled so much construction in Spain and Portugal will also lead to big bank losses - but who has been bankrolling these projects? I'm very doubtful that all the money has been domestically sourced.
If the German banks have been lending big time to club med, it might fuel the temptation for a club med country to break out of the euro. By re-denominating all the nation's debts into a new currency, and then allowing inflation to take off and the currency to devalue, the debt gets reduced at the expense of the Germans..
5. European-bear said...
This is interesting. Swiss banks are exposed to the US market as they brought the securities, but at home in Switzerland, the market is very stable and lending practices are very cautious with 20% deposits always demanded. If Swiss banks had been as cautious in their investments in US mortgage backed securities as they are in their domestic property market they would not have a problem. Now to British banks, not so exposed to the US securities, but look at the home mortgage market. UK has about 25% population of the USA, but housing is much more overvalued. And British banks have not exported their dodgy lending practices to foreign banks, so they have complete exposure to the UK property meltdown. This means that if there are mass repossessions when the crash really is in full swing, perhaps in a year then the exposure of British banks to the dodgy Britrish mortgages will be proportionately larger than anything the US banks or even the Swiss banks have to deal with. Could well be a few more Northern Rocks waiting to go bust. I hope they do as that may teach the banks not to lend recklessly in the future....
6. mken said...
seanb303 - see if you can email me via the webmaster
7. mken said...
European-bear -
I read an article recently about how the Swiss banks funded their international expansion by giving their account holders in Switzerland very low interest rates - 1 to 1.25%. This compared to 5ish% e.g. in Germany. i.e. there is no banking competition in Switzerland.
The domestic property market in Switzerland is actually pretty much fenced off against speculation - you pay heavy tax on any property you own regardless of whether it is occupied or not and when it comes to selling CGT is very heavy even 20 years down the line. Perhaps these facts made the Swiss banks desperate to join in pushing up the prices elsewhere.
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