Euromoney Jumps On The BoomBustBandwagon: French banks most systemically risky in Europe

Reggie Middleton's picture

Yesterday I opined extensively on transparency (actually, the lack thereof) in the European banking system - Transparency In The European Banking? Madness, I say! Sheet, Utter Madness!!! I tore into the Irish banks as well as reminding all of the 2011 research that found the French banks to be the weakest link in pan-European banking contagion. Of course, you'd never here that from the sell side. Well, as luck would have it, look what I found on today (Hat tip @StaceyHerbert)...

French banks most systemically risky in Europe – HEC Lausanne study:

According to systemic risk measures for European financial institutions, developed by the Centre for Risk Management at Lausanne (CRML), French regulators would need to provide €300 billion, as of mid-May, to fulfil regulatory requirements in the event of a global financial crisis, defined as a 40% semi-annualized fall in global stock markets.
Using methodology developed in collaboration with the well-known and influential New York University Stern’s Volatility Institute, run by NYU professor Leonard Stern and Nobel laureate Robert Engle, the index gauges large European banks’ systemic risk by measuring size, leverage and exposure to global equity market shocks. The dynamic index, updated on a monthly basis, reveals that, as of mid-May, Crédit Agricole has the greatest risk exposure of any bank in Europe, followed by Deutsche Bank and BNP Paribas.

Hmmm... Now, where have we heard this before? 

French Banks Can Set Off Contagion That Will Make Central Bankers Long For The Good 'Ole Lehman Collapse Days!


This Is Why BoomBustBlog Is THE Place To Go For Hard Hitting Research: BoomBust BNP Paribas?

The WSJ article excerpted above quotes BNP management as saying: "The bank has €135 billion in "unencumbered assets after haircuts" that are eligible to central banks."

OK, I'll bite. Excactly how did BNP get to this €135 billion figure? Was it by using Lehman math? Methinks so, as clearly delineated in my resarch report on the very first page:



 The Beginning Of The Great French Unwind?!?!?!...

Another BIG Reason Why BNP Paribas Is Still Ripe For Implosion!

As excerpted from our professional series File Icon Bank Run Liquidity Candidate Forensic Opinion:

... Now, if you were to employ the free BNP bank run models that I made available in the post "The BoomBustBlog BNP Paribas "Run On The Bank" Model Available for Download"" (click the link to download your own copy of the bank run model, whether your a simple BoomBustBlog follower or a paid subscriber) you would know that the odds are that BNP's bond portfolio would probably take a much bigger hit than that conservatively quoted above.  Here I demonstrated what more realistic numbers would look like in said model... 


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Zero Govt's picture

Great article Reggie Rooster :)

"... how did BNP get to this €135 billion figure? Was it by using Lehman math?"

You mean Enron math (accountants) don't you?

the accountancy professions lying and cheating goes back much further and much deeper than Lehman... is it mandatory memory loss amongst accountants to forget Reggie Roo?

the accountancy profession has done a fantastically senile job to date, that accountants (paid crones) cooked Enrons books whereupon the profession all turned a new leaf (cough) and swung the fiery sword of truth since that fateful day being found taking big fat wads of dirty cash for cooking the books (ie. fraud)

well the sword of truth swinging lasted all of 5 seconds 

the international accountancy practices are all back, without exception, cooking gambling-junkie bums (bwankers) books taking fat wads of cash like Enron was an illusion that never happened

Accountancy is a State-Legal-Aid fake industry propped up by Govt regulation, enforced by regulation ...accountancy (number smiths) are like lawyers (word smiths) State dependents, fantasy construct industries on the false and clear as day total political bullshit auditing reveals the "truth" and lawyers give us "justice" ...they're not just rats (paid crones) chasing fees 

the sooner these sham worthless professions, proven beyond all doubt don't do anything they're supposed to do, go down the sewer attached at the nipple of the bankrupt corrupt State the better 

falak pema's picture

RM : on a side issue we keep hearing that Deutsche bank derivative exposure is 55 T Euro notional.

What does that amount to for French banks; BNP and all the other big three french, SG, CA, Banque populaire, as the insurance company AXA? 

aleph0's picture

Always on the Ball Reggie .. Thx
And the German Press rumours that Deutsche may  assimilate Commerzbank.

One wonders whether there are any big banks left in Germany ( DB bought Postbank a while ago ).
Dresdner was assimilated years ago ( Allianz IIRC ) .... + Landesbanken going,  going  / one gone (WestLB).
Basically that leaves just the Savings Banks ( Sparkassen ) of which I think there are ca. 17,000 around.... where most of the (small) Germans have their money  I expect.
No wonder the EU wanted to include them in their "oversight" .. LOL, they are probably the only ones still relatively solvent and probably not enmeshed in the Derivative Matrix .. I hope !
The Sparkassen of course protested .. & I haven't heard whether they are "now included" .. anyone here know ?