EuroZone Bank Exposure to Italy by country

fun!  follow the link to access the EuroZone Bank Exposure by country to Italy interactive chart

And bank exposure to italy map and graph:

zerohedge on fire today

www.zerohedge.com

• Bank Downgrades Jump The Atlantic: S&P Cuts Italian Intesa Sanpaolo, Mediobanca From A+ To A
• Moody's Goes For Trifecta, Downgrades Citi Short-Term Rating Of Citi From Prime-1 To Prime-2
• Double Tap For Octogenarian Of Omaha: Wells Downgraded From A1 To A2
• Suck It Up Warren - Moody's Downgrades Bank Of America From A2 To Baa1
• 'Twist' Sends Ultra Investors Shouting With 30Y Treasury Yield Back To Jan 2009 Lows

Effects of Glass-Steagall repeal

All eyes still on Europe, but once the calamity happens there, we get our turn & we have 4 TBTF banks.


from groovygirl:


"Very clearly shows the impact of the repeal of Glass–Steagall Act of 1933 (was signed into law in 1999). Internet Bubble burst early 2001 compounded by 9-11. Final creation of formal “too big to fail” banks happened in 2008-2009. Chart also shows that 1990′s were not as productive as once thought. Financial industry just consolidated, they didn’t really expand."

European Banking crisis

another Ambrose Evans-Pritchard gem:

Central bank flight to Federal Reserve safety tops Lehman crisis

A key warning signal of global financial stress has shot above the extreme levels seen at the height of the Lehman crisis in 2008.

Cutout:

Data from the St Louis Fed shows that reserve funds from "official foreign accounts" have doubled since the start of the year, with a dramatic surge since the end of July when the eurozone debt crisis spread to Italy and Spain.

"This shows a pervasive loss of confidence in the European banking system," said Simon Ward from Henderson Global Investors. "Central banks are worried about the security of their deposits so they are placing the money with the Fed."

Slowdown? / Focus is on Europe!

ITALY:  Bank of Italy warns on growth as bond sale falters -- Reuters

EURO BANKS 1: WSJ article (need login, but even if you don't the key point is above the login):  In a 54-page report sent to hundreds of Goldman's institutional clients dated Aug. 16, Alan Brazil—a Goldman strategist who sits on the firm's trading desk—argued that as much as $1 trillion in capital may be needed to shore up European banks; that small businesses in the U.S., a past driver of job production, are still languishing; and that China's growth may not be sustainable.

EURO BANKS 2: Business Insider article: The Latest on the funding situation at European Banks:

"Regardless of the actual liabilities of these banks, it is doubtful any of them could have planned for this sudden drop in equity. At the same time, earnings aren't picking up the slack. Add that to new fears that the Greek bailout will not go through quickly enough to save Greece from a full-blown default (no selectivity) and the ensuing contagion risks.

The real wild card here is the European Central Bank. It could provide virtually unlimited funds to these banks, but their balance sheets have to be strong enough to qualify for lending. This should not be a problem in France and Germany, but the longer it takes to come out with a viable solution to this crisis, the more likely this problem could be."

LIBOR RISE: Finally, a nice Chart from Business Insider about LIBOR rates

Major banks on both sides of the Atlantic are self-reporting higher and higher interbank USD borrowing rates, meaning that funding is getting more expensive in a hurry.
This graph from ZeroHedge demonstrates a sharp rise in the 3-month USD LIBOR -- a benchmark interest rate for short-term borrowing of U.S. dollars -- over the last two months. Every bank detailed saw an increase in its short-term borrowing costs.
Reuters reports that European banks are paying slightly more than the fixed LIBOR rate while U.S. banks slightly less. On the whole, 3-month rates are at their highest since last August.
We keep talking about signs that the funding situation for eurozone banks is going downhill, and this looks like the newest sign that dollars are becoming increasingly expensive. Rising borrowing costs could provoke a credit crunch that would lead to another global slowdown.

European Banks -- BIG TROUBLE AHEAD for everyone

from zerohedge:

Cue Panic As Fed Resumes Liquidity Swap Lines, Lends $200 Million To Swiss National Bank, Most Since October 2010

Submitted by Tyler Durden on 08/18/2011 - 16:19

If yesterday's news broken by ZH that one bank was in dire need of US dollars and ended up borrowing $500 million from the ECB was enough to send the market down almost 5% today, then the follow up news that the FRBNY just reactivated FX swap lines with Europe will likely send ES limit down at tomorrow's open. The FRBNY has just announced that in the week ended August 17, it lent out $200 million to not the ECB, not the BOE, but the "most stable" of all banks: the SNB. This is the first use of the Fed's Swap Lines since March, and the most transacted under this "last ditch global bailout swap line" (see more on how the Fed bailed out the world using swap lines here) since October 2010. This event also gives us a hint that the European bank in question in dire need of cash is Swiss, which in turn means that it is not some usual PIIGS suspect, but one of the two "big ones." If true, this means that the European insolvency, liquidity and what have you crisis is about to take an exponential step function higher.