Bankrupt Banks

I think someone asked me once why I thought the top one hundred city banks were bankrupt Well one reason is derivative positions that have just been published.

"There's already plenty of chatter about dealers' Level 3 exposure. Take Citigroup, for instance. In a recent SEC filing, they said they had $135-billion (U.S.) in Level 3 assets. They have an equity base of $128-billion, so their Level 3 exposure is 105 per cent of equity. Goldman has $72-billion in Level 3, or 185 per cent of their $35-billion in equity."

"And a report from the Royal Bank of Scotland this week predicted the total losses from Level 3 writedowns will be somewhere between $250-billion and $500-billion."