NEW YORK, Nov. 25, 2015 /PRNewswire/ -- S&P
Capital IQ and SNL, a business unit of McGraw Hill Financial (NYSE:
MHFI) and a leading provider of research, analytics and data, has
released new analysis showing that the world's 30 most systemically
risky banks have risk exposure that amounts to 76.7% of worldwide
gross domestic product. Sources of the data vary and are
noted in detail in the footnotes of the report linked here.
The ratio of total exposures to GDP is not an inherently risky
number, but it does demonstrate how concentrated financial risk has
become, especially considering the list of 30 G-SIBs is top-heavy.
SNL's report shows that the world's 30 G-SIBs have
$59.759 trillion in exposures; the
top 20 banks account for 83% of that total.
Further, total exposures among G-SIBs are particularly
concentrated geographically. Just five countries are home to the
headquarters of 23 G-SIBs with total exposures of $50.203 trillion, or 64.5% of world GDP.
Among the five nations with at least three G-SIBs — China, France, Japan, the United
Kingdom and the United
States — France and the
U.K. have the highest G-SIB exposure-to-GDP ratios at 287.8% and
273.7%, respectively. A fourth Chinese bank joined the G-SIB
list this year, raising the country's ratio to 121.3%. Japan had a similar ratio at 134.9%. The ratio
in the U.S. was 86.4%, despite the fact that the country has by far
the most G-SIBs, at eight. Comparing individual countries can be
somewhat complicated, as European banks tend to do more business
internationally than U.S. or Asian banks. The four G-SIBs with the
highest scores in the cross-jurisdictional activity category are
all Europe-based.
For the eight U.S. G-SIBs in aggregate, total exposures
increased more than 2% year over year in 2014. However, that rate
of growth was lower than the nation's GDP growth rate, meaning the
exposures-to-GDP ratio declined to 86.4% in 2014 from 88.1% in
2013.
For a full copy of the analysis click here or
email Christina Twomey directly
at ctwomey@snl.com with any questions.
Methodology: As part of financial
regulatory reform following the crisis, the world's 75 largest
banks submit data to the Financial Stability Board. This group of
international regulators uses the data to calculate total systemic
risk scores. Banks with higher scores earn a global
systemically important designation, which
subjects them to more stringent capital ratios under Basel
III.
Five equally-weighted categories make up a bank's G-SIB
score: size, interconnectedness, substitutability, complexity and
cross-jurisdictional activity. For the size component, a single
data point called total exposures determines the bank's score.
Total exposures include on-balance sheet items, such as total
assets, as well as off-balance sheet items, like derivatives or
counterparty risk. Measuring bank size by total assets alone can be
problematic due to differing accounting standards.
About S&P Capital IQ and SNL
S&P Capital IQ
and SNL, a business unit of McGraw Hill Financial (NYSE:MHFI), is a
powerful provider of multi-asset class and real time data, research
and analytics to institutional investors, investment and commercial
banks, investment advisors and wealth managers, governments,
corporations and universities around the world. The newly combined
firm, previously S&P Capital IQ and SNL Financial, integrates
breaking news, comprehensive data and expert analysis into a
variety of tools to help track performance, generate alpha, and
identify new trading and investment ideas, and perform risk
analysis and mitigation strategies. The firm offers the
S&P Capital IQ, SNL, Global Credit Portal and Market Scope
Advisor desktops as well as enterprise solutions, such as S&P
Capital IQ Valuations; and research offerings from Leveraged
Commentary & Data, Global Markets Intelligence, SNL Kagan, SNL
Energy, SNL Real Estate and SNL Metals & Mining. Together,
S&P Capital IQ and SNL sharpen financial intelligence into the
wisdom today's investors need. For more information, visit
www.spcapitaliq.com or www.snl.com.
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SOURCE S&P Capital IQ and SNL