“Deutsche Bank’s assets represent 80 percent of [Germany]’s GDP. In Switzerland, the assets of the bank UBS represent 450 percent of the country’s GDP. The financial exposure of the British banks is similarly alarming: Barclays PLC’s assets amount to more than 100 percent of the United Kingdom’s GDP, and the Royal Bank of Scotland’s holdings reach 140 percent of British GDP.
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That is why the “shock and awe” of the current bank bailout efforts hasn’t yet stabilized world financial markets. Investors suspect that the problem is just too expensive to confront. The IMF estimates that global banks have already lost $1.4 trillion. By the time the world fully enters into recession next year, global bank losses will almost certainly have increased dramatically. Some experts expect them to reach a whopping $5 trillion.”
