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“Too Big To Save”

By Andy Shaw | January 26, 2010

Originally posted 27th July 2009

We’ve all heard the term “too big to fail”, but we are going to start sometime very soon hearing about the European banks with the very real problem that they are “too big to save”. In the US they had banks that were too big to fail and so they stepped in to save them. The difference was that they could because of their debt to GBP ratio.

Well I have kept saying that the problem in Europe is worse than in the States and today I’ll explain why. In the UK the assets of the banks are about 5:1 x the size of our GDP. When you compare that to the US their ratio is less than 2:1.

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Topics: Government, The Economy | Comments Off

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