Headquarters of the Bank for International Settlements (BIS) in Basel
Posted on 07/26/2011 5:39:32 PM PDT by bruinbirdman
European banks raised their purchase of US state debt during the first quarter of the year by 56 percent and are now the most exposed foreign banks to US public debt, the BIS said Tuesday.
European-headquartered banks' holdings of US debt reached $752.6 billion at the end of the first three months of the year, while claims on the US banking and private sector held steady during the period, according to fresh data released by the Basel-based Bank for International Settlements.
Headquarters of the Bank for International Settlements (BIS) in Basel
The United States is currently in intense negotiations to raise the country's debt ceiling. If it fails to get a deal before August 2, the country could be forced to default on its obligations.
BIS data shows that overall public debt held by European banks increased across the board or held steady during the first quarter, except in Greece, where it fell by nearly $12 billion from the previous quarter to $42.9 billion.
Lending by European banks also fell in Japan, from $231.2 billion to $189.2 billion.
Europe has been in turmoil since last year due to fears that some of the continent's economies -- notably Greece, Ireland and Portugal, but also Italy and Spain -- would be unable to meet their debt obligations.
On Monday, Greece's rating was cut by three notches to just above default status by Moody's agency.
German banks were the biggest lenders to the Greek state, to which they lent $14.1 billion or 33 percent of total Greek public debt.
Their French counterparts were close behind, lending 31 percent of Greek state debt.
French banks hold 30 percent of Spanish public debt while German financial institutions hold 27 percent.
French banks meanwhile also have significant exposure to Italian state debt, holding about 45 percent of the country's public debt, according to BIS data which only includes figures from 24, mostly large economies.
The data however excludes China, the biggest holder of US treasury bonds, as well as data on public sector claims held domestically by banks headquartered in the same country.
That was dumb with Obama in office...lol. I bet this is part of Obama’s plan. He can bring down the USA and Britain..two countries that he hates the most...in one fell swoop.
Actually he hates Israel the most. I am surprised that you are a FREEPER and don’t know that. Study up bud.
Of course..that is a given...bud.
No surprise at all... After all, they had to find some way to innoculate themselves from the Greek (and coming Spain, Portugal, and Italy) bailout.
It goes like this... Buy bonds from the US - that puts you and me, the US Taxpayer, on the hook. The US Government gets a chunk of money from those same banks. Then the US Government turns around and gives money to Greece for its bailout.
If Greece defaults anyway, the European banks aren’t the ones who made the loans - the US did. So we lose the money. And it’s part of our Constitution that we must repay foreign debt, so unless the US as a whole goes bankrupt, those banks will get paid.
Brilliant, in a twisted, Machiavellian way!
From the article:
"German banks were the biggest lenders to the Greek state, to which they lent $14.1 billion . . ."
"Their French counterparts were close behind, lending 31 percent of Greek state debt."
yitbos
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