Europe’s Other Gigantic Bank Problem

One would think the following chart has a data error.  Not so.

Europe is way over-banked and the chart illustrates the monumental task of recapitalizing some of their largest banks.  The size of the largest four banking institutions in France, for example, represents over 300 per cent of the country’s GDP.  The markets will monitor carefully the sovereigns’ incremental obligations of the new recapitalization plan.  They need to be careful not to turn France into Ireland, for example, which will definitely be game over for the Euro.  Stay tuned.

P.S.  Long Swissie during a European banking crisis?   No thanks!

european banks gdp ratio

(click here if chart is not observable)

Read more posts on Global Macro Monitor »

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.