The Bankwatch

Tracking the consumer evolution of financial services

Risk of bank default is back to Sept 08 / Lehman failure levels

Following along on the theme of what to do with the top banks, this indicator tells us the work to date has failed.  All that money being placed in banks is not reducing the expected risk.  This is a serious matter and inappropriate methodology of use of government (US, Canada, UK and European) funds.  It points to nationalisation as one alternative option to the current use of funds.

The cost of insuring against a bank default – that means a bank going out of business and this is for the top banks, Bank of America, UBS, Barclays, Lloyds etc, is back to September levels when Lehmans collapsed.

graph-phil450a

  1. Bear Stearns debacle
  2. Lehman bankruptcy and AIG bail-out

Click through to Economist for list of all events on the chart.

There are 14 banks in this index including:

Bank of America, Citigroup, Goldman Sachs, J.P. Morgan, Merrill Lynch and Morgan Stanley, UBS along with seven other foreign firms.  If anyone has access to the full list, please post in the comments.  I am especially curious if there is a Candian representative bank.

Written by Colin Henderson

March 4, 2009 at 23:50

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