6 Sep 2015

The 50 biggests banks in 2014 : $65 trillion in assets - $758 billion in Capital

I really like the list of the worlds 50 biggest banks provided by the www.accuity.com website. Now that their table is based on the bank balance sheets for the end of 2014, it is possible to get a clearer idea of what is going on by copying all the numbers into an Excel sheet. And here are the results.

As you can see, the total assets held by those 50 banks total very nearly $65 trillion.  That's a very substantial proportion of the roughly $80 trillion value that you get by adding up all the figures for Money Supply of all the economies in the world.

But the amount of capital they have is only about $758 billion. And that means that the banks have 86 times more assets than they have capital. So much for the myth that banks always keep about 10% in reserve...

Those ratios vary enormously from bank to bank. For example, the Norinchukin Bank in Japan only has 24 times more assets than capital. But the winner is the Wells Fargo Bank, which has assets that are a staggering 2953 times larger than their assets. I have no idea how they are allowed to get away with it.

It's very interesting to compare the current table with the numbers the first time I blogged about this in 2013. At that time, based on bank balance sheets that mainly dated from the end of 2011, total assets were very close to the current values - $64.2 trillion, as was the figure for total capital, namely $785 billion.

But behind those headline figures the whole picture has changed. Back in 2013, the biggest bank in the world was DeutschBank with $2.8 trillion in assets. But since then, they have got rid of over $737 billion worth of assets and have dropped down to number 8. Barclays, which was number 4, has offloaded over $304 billions worth and dropped to the number 6 slot. Likewise, Credit Agricole SA which was number  6 has reduced its assets by over $311 billion and dropped down to number 10.

At the same time, you can see that Chinese banks have been buying up assets like crazy, so that now 4 of the 5 largest banks in the world are now Chinese, with the Industral & Commercial Bank of China Ltd now being  the biggest bank there is. It is the happy owner of well over 3.3 trillion dollars worth of assets. Aren't they lucky.

Now, frankly, I haven't really got a clue (as I am sure some kind reader will point out). But I just wonder why the destablising of the entire global economy that we have witnessed over the past couple of years might not be explained by the fact that Chinese banks have somehow been convinced to buy up trillions worth of assets from the Western Banking sector. 

Of course, I would never wish to suggest that the Bankers in charge of the worlds 50 biggest banks could possibly not be working for the general good of the world's citizens.

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