Are we headed for another Lehman moment in Europe?

dereksatkinson said:

Oh.. and Reggie is brilliant~!

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... I have found a bank that literally has more derivatives risk than Citibank, Goldman, Morgan and JP Morgan - COMBINED! That's right, and on top of that if you peek under the covers (and not just follow the fodder in the annual reports) it apparently has the greatest mortgage risk in the industry. ...

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According to the latest quarterly report from the Office Of the Currency Comptroller the top 4 banks in the US now account for a massively disproportionate amount of the derivative risk in the financial system. Although the [subject bank] with the xth largest derivative exposure stands a significant distance behind JPM, Citi, Bank of America and Goldman Sachs (the four largest players); the exposure quoted in OCC report is only for the US entity. Overall, [subject bank]’s group derivative exposure in its balance sheet is 220% of its tangible equity, far higher in both absolute and relative terms when compared to its peers. [Subject bank]’s on balance sheet derivative exposure is higher than the combined share of Goldman Sachs ($74bn, or 115% of TEC), JP Morgan ($78bn, or 62% of TEC) and Morgan Stanley ($46bn, or 114% of TEC). What is more worrying is the quality of these derivative assets. Of the total notional value of credit derivatives (over half trillion $US bn), nearly 60% are non-investment grade. [Subject bank] has the highest proportion of non-investment grade credit derivatives followed by Citi Group (55%), GS (52%), Bank of America (37%) and JP Morgan (32%). The tables below as well as on the following page compare [subject bank]’s on-balance sheet derivative exposure...
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PMBug said:

... the rumor I heard about a run on HSBC. ...

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... "Thousands of HSBC customers faced the ultimate embarrassment of having their cards declined this afternoon as the bank suffered a 'worldwide meltdown'. Fourty seven countries have potentially been affected in the world's second largest bank. Cards were rejected at tills, cash machines read that withdrawal limits for today had been reached, and the card enquiries phoneline was also down. Unsurprisingly there was pandemonium in HSBC branches up and down the country as people rushed to find out why their cards had rejected." ...

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