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Monday 6 July 2015

The True Cost Of Exposure To Greek Restructuring of Debt


Total German Banking Exposure: €28 billion
€56 billion is owed to Germany as part of Greece's bailout. Please also note that the German Government has, effectively, 'underwritten' German banking exposure (above) by providing this 'loan' to Greece.
Nominally, therefore the German 'debt' owed by Greece is to the German Government and not to the German Banking sector per ipse.
A default however, would as much affect German Banks as it would the German Government in that it would seriously undermine it's ability to provide such 'cushions' should other similar crises occur, globally, simultaneously.
Keep in mind that China's economy is 'over heating' and the South American 'bubble' may be about to burst (Brazil, Venezuela, Chile, Bolivia and Ecuador should be of note here.)
The 'perception' of the German Government's exposure [and potential exposures and ability to respond as effectively as in the Greek situation] is also a key issue in global market stability.

Banks Most Affected:
Exposure (in Euros)

Credit Agricole [CAGR.PA]  € 4 billion

BNP Paribas [BNPP.PA]                            € 700 million

Societe Generale [SOGN.PA]                                 € 300 million
 
Deutsche Bank [DBKGn.DE]    €2.3 billion**


Commerzbank [CBKG.DE]                            €400 million
Deutsche Bank                                                 * € 300 million

**According to a Bloomberg report on June 29, Deutsche Bank has a $2.3 billion exposure in Greece

*Official German government figure.

Why Deutsche Bank Is In My Focus
Of the total German exposure, 4.6 billion euros was to other banks, 3.6 billion euros to companies and private individuals, and 15.2 billion euros to state entities, the BdB said.
"The credit exposure of German banks in Greece is low," BdB head Thomas Kemmer said in a statement. "That's why, should it come to insolvency for Greece, the direct effects on German banks could be overcome.''

This statement itself is quite correct but it does not take into account DB's total global exposure -especially in the South American regions of Brazil, Argentina, Chile, in China and South East Asia - not to mention in Eastern Europe, the Caucasuses and in Russia.

What you often see are compartmentalized figures only focusing on one crisis.
[Please refer to my earleir blog references where the full problem which could affect DB, should several regional economies downslide, or politically motivated trade sanctions which adversely affect DB, are in effect.]
Hence the reason why the reinsurers and 'repackagers' of debt – be it the German Government taking on [or underpinning] 'corporate' debt or other major institutions could be critical should their perception of market trends turn negative.

Detailed Analysis of The Total Banking Exposure To Greek Restructuring Of Debt

To Whom The Debt Is Owed                            Amount

Greek Banking Sector                                   € 11 billion

Bank of Greece                                                        € 4 billion

European Central Bank [ECB]                       € 20 billion

International Monetary Fund [IMF]           € 32 billion

France                                 € 42 billion

Germany (as part of the Greek bailout)

                       € 56 billion (see above)

Other Eurozone Countries
(as part of the Greek bailout)               € 34 billion

Other Bonds (investors)      € 49 billion

Other Loans (creditors)                           € 11 billion

Italy                                               € 37 billion


Spain                                                         € 25 billion


Foreign Banks                                                           €2 billion


TOTAL DEBT AT TIME
OF DEFAULT [30th June, 2015]
and restructuring negotiations
[to commence shortly]                       € 315 billion 




 *latest figure released by Bloomberg on June 29th and
also refer to Yahoo Finance today [9 hours ago, 7th July] at

http://finance.yahoo.com/news/deutsche-bank-stock-dropping-more-155114781.html

If you can find your way through the financial maze to the lighter side of this tragic comedy you might want to look up the following reference:



[If you are a banker you won't find anything here to laugh about so please do not visit the website – it's solely meant for ordinary folk trying to understand the 'bigger toys for bigger boys '- and girls!]

Please note the comments below of one very angry Greek citizen.
What he says at the above website about how the information is being presented in the European media, in general, is absolutely true, in fact.
This however does not change the figures outstanding - but it does explain why after 5 years of severe austerity it has been impossible for the Greek government to implement any meaningful economic stimulus to the economy.

Update:
Atc Stalikas ·
Director at A.T.C. Agrinio Hellas.

''Most of you are ignorant of the real facts. You are the victims of the international mass media propaganda that aim to discredit the country and humiliate its citizens. None of the money mentioned went to Greek people. If it was so the fate of the country would have been better today. All the money went to support their banks and passed the debt to Greece. It is about time to wake up and see the issue in its real perspective.''
Like · Reply · Jul 11, 2015 3:15pm



©Patrick Emek, 2015


Other references:


Moody's downgrades credit rating on French banks Societe Generale and Credit       Agricole  

8761709/Moodys-downgrades-credit-rating-on-French-banks-Societe-Generale-








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