Is the European banking model broken?

…a far higher proportion of U.S. loan books are funded by deposits. The U.S. market has a loan to deposit ratio of 78% compared to more than 110% in Europe. European banks have a total funding gap of $1.3 trillion ($1.72 trillion) which they need to finance in wholesale markets, estimates Simon Samuels, a banking analyst at Barclays Capital.

The article is interesting, and depressing, throughout.  Here is the FT on related issues:

Describing it as a “Ponzi scheme”, Marc Chandler, currency strategist at Brown Brothers Harriman in New York, says simply: “Weak banks are buying weak sovereigns.”


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