The BofA $136B Dynamite Stick

Now the United Kingdom is on the hook for some of the largest banking institutions in the world. (RBS’s balance sheet alone when it was nationalized was bigger than the United Kingdom’s GDP.) Indeed, the banking sector in the United Kingdom is one of the world’s largest: Assets of U.K. banks are more than five times the country’s GDP. In the United

Lehman was not alone in being highly levered: the leverage ratio for other major U.S. banks was about 30 and had been increasing steadily in the run-up to the financial crisis.75 Although historical data on leverage ratios for U.S. banks is spotty, an analysis by the Bank of England on United Kingdom banks suggests that the overall degree of levera

To understand how the current system might spin out of control and where the unraveling might begin, look at where the complexity – aka systemic risk – is of late being concentrated most quickly. Post-2008, the two areas that stand out are government debt – which has been substituted for private debt as governments have borrowed unprecedented amoun

banks always have enormous financial leverage ratios, so don’t be scared off by a leverage ratio that looks high relative to a nonbank.