Bank assets as a percentage of gdp

by on December 6, 2010 at 4:11 pm in Economics | Permalink

Via Megan McArdle (from a good post on why it's hard to leave the euro), we are offered this list:

Bank assets as a percentage of GDP

Luxembourg 2,461
Ireland 872
Switzerland 723
Denmark 477
Iceland 458
Netherlands 432
United Kingdom 389
Belgium 380
Sweden 340
France 338
Austria 299
Spain 251
Germany 246
Finland 205
Australia 205
Portugal 188
Canada 157
Italy 151
Greece 141

(For comparison, total banking assets in the U.S. are equal to approximately 82 percent of GDP.)

File under "Too Big To Save."  Do be a little careful, however, since countries such as Ireland have financial institutions based there, for tax reasons, without the Irish government feeling responsible for them. 

peter December 6, 2010 at 12:23 pm

Very interesting, but why should countries like Canada and Britain have far higher bank assets relative to GDP than the US? Sounds like a major difference in national capital structure that I had no clue about.

Steve W. December 6, 2010 at 12:41 pm

The US capital markets permit companies to access capital in a number of channels, banks being but one. Bank loans as a % of total loans outstanding have gone down consistently for over 40 years, as tools such as money market mutual funds, public and private placements of debentures and bonds, repurchase agreements and reverse repurchase agreements have provided ways to "disintermediate" debt.

Wonks Anonymous December 6, 2010 at 2:14 pm

Didn't Ireland already guarantee the banks?

Philo December 6, 2010 at 6:05 pm

"[C]ountries such as Ireland have financial institutions based there, for tax reasons, without the Irish government feeling responsible for them." Then a more useful list would be: Bank assets *for which the government feels responsible* as a percentage of GDP.

Anthony December 6, 2010 at 9:04 pm

…countries such as Ireland have financial institutions based there, for tax reasons, without the Irish government feeling responsible for them.

Isn't the main source of Ireland's current woes that the government did feel responsible for institutions which were based there for tax reasons?

john haskell December 6, 2010 at 11:29 pm

@ Philo, Anthony – when the Irish Government passed its deposit guarantee in Oct 2008 they only covered six "truly Irish" banks, not offshore entities. Of course it raises the question that if the offshore, but Dublin HQ'd banks are not "Irish," whose are they?

Furthermore, it is obvious that an Irish government guarantee of a bank is only worth as much as the German guarantee guaranteeing the Irish government guarantee.

Silas Barta December 7, 2010 at 8:26 am

Somehow, I think "yo, you f***ed, bro" just doesn't quite go far enough.

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