Data Show Big Exposure for Banks in Euro Zone

(…) Data released Sunday by the Bank for International Settlements showed that banks based in the 16 countries that use the euro accounted for $1.58 trillion, or 62%, of all internationally active banks’ exposures to residents of Greece, Ireland, Portugal and Spain.

That included $727 billion of exposure to Spain, $402 billion to Ireland, $244 billion to Portugal and $206 billion to Greece, with about half of the Greek exposure held by France.

By far, France and Germany held the greatest exposure to the group, collectively carrying 61% of the total euro-area burden: $493 billion and $465 billion, respectively.(…)

Of that total exposure, almost half was to Spain—$248 billion for France and $202 billion for Germany—with French banks particularly exposed to the Spanish nonbank private sector, while more than half of German banks’ foreign claims on the country was on Spanish banks.

British and German banks had exposures to Ireland of $230 billion and $177 billion, respectively, while Spanish banks had the greatest exposure to Portugal, at $110 billion.

Government debt in Greece, Ireland, Portugal and Spain, meanwhile, accounted for only around 16% of euro-area banks’ exposure, with $106 billion belonging to France and $68 billion to Germany. Of that, $48 billion of French exposure was to Spain, $31 billion was to Greece and $21 billion to Portugal, while in the case of Germany it was $33 billion, $23 billion and $10 billion, respectively.

As a percentage of Tier 1 capital, German, French and Belgian bank exposure to Spain, Greece and Portugal’s public sectors amounted to 12.1%, 8.3% and 5%, much higher than other countries. (…)

Full WSJ article


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