Europe’s Other Gigantic Bank Problem en-us Wed, 31 Dec 1969 19:00:00 -0500 Sun, 16 Mar 2014 14:39:57 -0400 Global Macro Monitor MikeA Sat, 15 Oct 2011 08:18:01 -0400 That's not entirely true. European countries - unlike the United States - are addressing their debt problems, with spending cuts, reforms and higher taxes. And without the EFSF the troubled countries would be deeper in debt, since interest rates would be much higher without it. Also, bringing down debt is a gradual process, you can't do that overnight. If you're worried about a country borrowing too much, worry about the United States instead. Unlike Europe, they've not even started addressing their structural problems. For now, the United States is safe, but with debt to GDP quickly reaching Italian, and somewhat later, Greek levels, the United States is living well beyond its means and is still in denial. NewWorldPartyDotOrg Sat, 15 Oct 2011 01:32:39 -0400 Europe will try to solve a debt crisis with more debt. With the EFSF, they will bring their over-borrowing up another notch, by borrowing more to bail out the incompetent countries that borrowed too much and the incompetent banks. This means that they will steal even more from their children. Read: Europe's "Stealing from Children" goes into Overdrive <a href="" target="_blank"></a> Gary Anderson Thu, 13 Oct 2011 21:31:57 -0400 I would like a chart of TBTF banks from each country to see comparison of those to GDP. nerdbert Thu, 13 Oct 2011 21:21:35 -0400 Just because the _State_ of California is essentially bankrupt doesn't mean that the businesses there are bankrupt. Yes, it will be somewhat of a drag on their earnings as they move more and more of their business out of the state because the state will start raising taxes and fees, but the overall effect on the US will be minimal. But California has been broken as a government since I left there in the 80s. They've just been lucky that there hasn't been a bigger economic recession since the last big one under Reagan, and with this one they're paying the price for electing spend-and-borrow politicians. Singapura Thu, 13 Oct 2011 20:23:01 -0400 Bank liabilities are not equal to country liabilities even if BI wants you to believe otherwise. Bailout by the government is not an given and countries are not obliged to honor non state-owned bank's obligations. California contributes 12% of the US' GDP and is practically bankrupt. Now THAT's a problem. PeterUK Thu, 13 Oct 2011 20:17:12 -0400 Why did you rig this chart wildly in favor of the United States and included only the four largest banking institutions? Why didn't you show the entire financial sector per country as a percentage of GDP? As of now, for comparisons sake, this chart is meaningless. Smaller countries, like France, have few banks, and four big banks make up almost the entire financial sector. Bigger countries, like the United States, have many banks, and four big banks make up a relatively small part of the entire financial sector. If you include the entire financial sector per country, the United Kingdom and the United States, will very likely come out on top, since these two countries have extremely large financial sectors (The City & Wall Street).