Europe's "Dead Bank Walking" List And An ETA Until The Next Contagion Peak

Tyler Durden's picture

In yet another 2011 déjà vu moment, Europe’s bank funding window is slamming shut again (the catalyst that brought the 2011 Euro crisis vintage to its heights). Nowhere is this more evident than when comparing monthly debt issuance in the first 4 months of 2012 to the previous two years. Sadly, even despite taking place while the LTRO effect was front and center, Europe still was unable to match prior year debt.  Fine, the skeptics will say, this simply means that there is less debt maturing and thus less need for new issuance… And the skeptics would be wrong. As charts two and three demonstrate, this is broadly correct for only 4 countries, of which 3 still have their own currencies (coincidence). The balance is a sorry sight, with Germany, Spain and Italy seeing nearly EUR100 billion in net unrolled redemptions just Year to Date alone! As UBS very poignantly points out, “It is difficult to see this as anything other than contagion from the latest variant of the euro crisis.”

Total debt issuance YTD 2012 and compared to 2010 and 2011:

Total YTD debt issuance by country:

And debt issuance net of maturities:

So as the contagion tsunami once again rises to its summer-time crescendo, the market will be quite curious which banks provide the best target practice in a world where suddenly shorting European banks is once again allowed (for how much longer we wonder). And once again courtesy of UBS (which is quite happy to present other banks’ dirty laundry in a smart redirection effort punctuated by the following footnote: “Note: data on UBS is publicly disclosed”)  we show readers which banks have once again lost all capital markets access and are most heavily reliant on the ECB as a “key component of the financing structure”

ECB is the primary liquidity lifeline in absolute terms for the following banks:

Same in relative terms, as a % of funded assets.

To the banks mentioned above, we just want to say ‘no hard feelings’: we leave you with UBS’ conclusion on what is certainly inevitable, and will allow you to kick the can down the road at least one more time as y’all get bailed out one more time.

We see a significant possibility of the need for further ECB intervention in coming weeks and months to provide extra funds the financial system and sovereign in Spain, while the debate over banking reconstruction takes place… The market is unlikely in our view to provide the authorities the time to deliver solutions without further official support.

Translated: expect the next Euro-contagion peak within the “coming weeks and months.”

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vmromk's picture

You listening Bernanke ???   GO FUCK YOURSELF.

You and the criminally insolvent banks your fucked up policies are trying to save.

Careless Whisper's picture

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Arnold Ziffel's picture

"Thousands of vacant homes across South Florida have deteriorated into eyesores that violate local health and safety laws, depress property values and spread blight. The owners of these homes: some of the world's biggest banks."

I am Jobe's picture

2013 and beyond gonna look pretty interesting . USSA= Japan.

SockPuppetMan's picture

That is, until it no longer is.... then we become Weimar Republic 2.0. Get your part hats, all!

Manthong's picture

LOL..  :D   Chinese car show booth babe boobs and they have a "Lady Guagua" over there.

Seer's picture

Muy broken windows, the economy will be saved! </sarc>

knightowl77's picture

L.A. Coroner Dead From Poison; "Nothing To Do With Andrew Breitbart"


That is just too wierd for words....I do not believe in coincidences....

Uchtdorf's picture

picture that is purportedly censored. in other words, the mass media is not showing the large crowds he draws lest the rest of the sheeple become aware of alternatives to the Rep/Dem joke.

Motorhead's picture

Bar charts, bitchez!

Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

So after this intervention, by how much will the projected Fed $700b QE have to grow by?

CryingBear's picture


Sudden Debt's picture

And still, those banker morons feel so supperior to the rest of us...

SockPuppetMan's picture

No, no, no, they are superior to us... us sheeple should just bend over and accept our fate.

Atomizer's picture



Christine Lagarde: [ touch tone phone entry]

Ring, ring, ring, ring

Anonymous Caller: Hello

Christine Lagarde: We have a serious situation developing, have you installed our troops in Chicago?

Anonymous Caller: Yes. Stop worrying. 

Christine Lagarde: You had better be right this time.

Anonymous Caller: < Click>

Christine Lagarde: Helllo? Hello? <Click>.


The Chameleons - Monkeyland

falak pema's picture

where are the famous french banks, Paribas, Credit Agricole, Soc Gen and Banque Pop   in this list?

Where is RM to give us the low down on the french side?

No frogs on the burner!!!


What's worse Debt issuance less maturity positive or negative??; don't quite get the picture, as don't understand the defintions. Love explanation. Also scale seems wrong : its says BN and we see 15000 issued. That means 15 T issued!

Impossible! No country has YTD issuance of 15Trillion.

TheGardener's picture

UBS is the bank to listen to. After all they committed high treason on their American customers . Or those that did not get it when UBS got bailed out with US money secured by the parting CEO, last of old guard. That old guard of Swiss banking that once considered Ackermann as morally unfit to become head of a Swiss bank, anyone of them, even though that`s what this face had been groomed for. Think of it, he got exiled to DB and might get back on top when the new Franc comes real. Weird, bankrupt traitors voicing zombie opinions...

falak pema's picture

UBS is involved in the biggest tax scam promoton amongst the rich in france, pulling money into Swiss land via UBS France; a public report by a journalist who has just published a book estimates the scam at 600 Billion Euros over 10 years! That's nearly 35% of France total public deficit! 

If the govt got this back the offcial debt would fall from 90% GDP to 55% GDP! Less than Maastricht limit. Thats how the cumulative tax scam of the GOOD Chirac-Sarko years, 2001-2011 have cost the country. Apart from the fact that now the banks are all hocked and all this private slush fund parked in Swiss land did nothing to boost the economic growth in euro land. It all went to China! So much for giving tax gimmicks to rich to get a boost on economic growth. Ask UBS...they are kings on the wild side of financialisation scam. 

Dick Darlington's picture

Lots of spanish banks there on those charts. Remember that spain has a huge covered bond market through which the spanish banks have financed their mortgage lending during the years of the epic housing bubble. Many banks are close to the legal upper limit where they cannot securitize their mortgages anymore through covered bonds so big parts of their "assets" are already pledged as a collateral in the cover pools. Covered bonds are senior secured so in the case of the "you know what", senior unsecured creditors sit on the bench sucking their thumbs while covered bond holders carve the carcass. Add ECB in to the picture and the situation looks way worse as the banks have pledged everything not nailed down as a collateral to get the LTRO-funding. Suddenly senior unsecured debt issued by those banks doesn't look that senior anymore...

trebuchet's picture

I get your point. 


I don't get the article point since banks reshuffled via LTRO so are looking to deleverage (net issuance not rolled over) which is surely a good thing??


The article is suggesting they wanted or tried to roll over, but why would some do that ,especially if it exposes senior unsecured??


someone pls educate a muppet like me





I am Jobe's picture

Soon enough this will be in the good ole USSA. I wonder how namy idiots in the in this country gonna celebrate 4th of July and wave that flag which is useless. So much for freedom, now go and bow down to your masters .

Seasmoke's picture

Jump you Fuckers !

Sandmann's picture

May simply be time to seize control of the banks - their Equity is a joke and they are insolvent. Take them into State ownership and close down prop trading altogether and cut off credit lines to hedgies. Time to make Banks into Utilities serving the Real Economy. Then they can be broken up into Consumer; Industrial; and Trade Finance Banks and initiate lawsuits against Executives and all Bonus Recipients for economic crimes against humanity

xela2200's picture

Which is exactly how it USED to be done. Government men would come into the bank one day and shut the bank down for the day. They would corral all bad debt out of the bank, bring bond holders and stock holders to zero. Fire or jail for main executives. Once the bank was healthy, they would take it public. Use the proceeds to cover losses from bad debts. Just like they did during the S&L crisis of the late 80's and what the FDIC wanted to do in 2008 again. However, Paulson didn't see it that way instead using panic to get Congress to pass TARP to bail out Paulson's buddies. Of course, AIG and car makers saw their opening and took advantage of government (your kids') money.

What bugs me worst than that is how many people saw that as a failure of capitalism itself instead of the opposite. Now, they are open to even more government intervention and socialism.

malikai's picture

I don't often hear the socialism/capitalism debate among the plebs. I usually hear the Khardasian/Snookie debate. Perhaps that has something to do with it.

Seer's picture

I was unfortunate enough to catch part of some "intellectual" discussion about this today.  All sounded just fine, esp for the choir they were preaching to (in order to continue to get the choir to pay for their non-productive lives), until you went off script and questioned the PREMISE.  This was a left-leaning discussion, and, just as with the right-leaning ones, the premise FAILS.

BOTH socialism and capitalism have to do with resource distribution, and BOTH are premised on the notion of the need for perpetual growth.

Anyway, the idiocy all too clear was that "money*" just needed to be more properly distributed.  Well, yes, the imbalances ARE there, but asking that we replace the one big bull in the china shop with a bunch of smaller calf bulls isn't going to keep the china shop from being wrecked.  Being bullish is being bullish, doesn't matter whether it's a story pushed by the "left" OR the "right."  The planet is becoming less and less bullish on humans (and their hubris of perpetual growth).

* Of course, this is the mechanism/trick to blow by a fucked up premise, get everyone to agree that "money" is essential (ha, ha... perhaps to the snake-oil salesmen/bankers who require it in order to create inflation), just ignore that the world is really physical, and that there are limitations (can't print food, water etc.).

Seer's picture

"May simply be time to seize control of the banks"


I mean, really, that's exactly what we're now doing.  Don't people get it?  The banks will have NOTHING but debt.  Everyone thinks that actual money is being pumped in to them and that they have VALUE- WRONG!  The money pumping has only been about bailing out the water coming through the busted out bulkheads, the bulkheads are STILL unrepaired- you'd be signing us all up to buy DEAD SHIPS!  Let these fucking things sink, with their greedy captains still lashed to the wheels!

Better to recreate from scratch, otherwise all the rotten bastards that helped run the ship aground will be commissioned again to "save" us (yeah, have them save "us" from their doings).

Seer's picture

Keep chasing your tail...  ALL GOVTS LIE (that they are stocked with liars is some sort of shock? get real!).  And, really, like the Constitution has any affect any more?

No gods no masters, party pussy.

f16hoser's picture

Hit pause, while I get a bowl of popcorn. This is gonna be good! Amerika to follow!

PaperBear's picture

Debt man walking.

orangegeek's picture

So what's keeping the SP500 up?


Elliott wave says pending crash.

swissaustrian's picture

If UBS or CS need Euro funding, they go to the SNB. SNB hs so many Euros on it's books, so there's no need to borrow from the ECB for Swiss banks. Additionally, there are the swap lines between the ECB and SNB. And last but not least: Why borrow Euros at 1% if you can borrow CHFs for 0% and convert them into Euros at a practically fixed exchange rate? The Euro isn't going to appreciate against the CHF anytime soon and the SNB is gonna be able to defend the peg - at least for a while...

Stoploss's picture

There's no interbank lending. If there was there would be a libor rate. Not that it matters, any interbank lending would cause velocity to sky and inflation right along with it.

There can't be any other lenders other than the CB's. That's how they control the infalation on a large scale. Banks moving funds between themselves can't happen any more.

q99x2's picture

Global policy shifting from austerity to growth.


Maybe we'll get a few bankster's out the hi rise windows this round.