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Report: Exposure from Top 30 Systemically Important Banks Exceeds 75 Percent of Global GDP

By:
Chris Gaetano
Published Date:
Dec 3, 2015
tightropeThe top 30 most global systemically important banks in the world have a combined total exposure amounting to more than 75 percent of global GDP, according to a recent report by S&P Capital IQ and SNL. Specifically, these banks have $59.759 trillion in exposures. The Gross World Product, the sum total of all economic activity on the planet Earth, meanwhile, is about $78.8 trillion, according to the CIA

While this is not an inherently risky number, according to the report, it does reflect how concentrated risk has become. The fewer banks there are, and the bigger their assets, said the report, the more pressure there is on governments to bail them out if one of them were to suddenly collapse, such as some did during the financial crisis. The report added that 23 of these banks are located in just five countries: the U.S., U.K., China, France and Japan. 

While the worldwide figure is impressive, the report went on to say that country-by-country exposure-to-GDP ratios are more meaningful, "since they offer insight into both the country's reliance on that bank and the country's financial capacity to deal with a failure." 

France and the U.K. have the highest ratios at 287.8 percent and 273.7 percent respectively; China's ratio is 121.3 percent; Japan's is 134.9 percent; and the U.S. was 86.4 percent, despite having the largest number of global systemically important banks, eight.