What is your main criterion for choosing your bank? Your money must first be safe. You must have confidence in the ability of your bank to make your money when you needed. Would you let your money in a bank saddled with debt? Your chances of ever seeing the color of your deposits would be greatly reduced. Exactly what is the debt ratio of French banks? How do they behave compared to their foreign competitors? What can you do with this information? Which banks are most reliable?
international standards of bank debt The Bank for International Settlements states in the famous Basel II rules of caution apply to all commercial banks. The debt limit not to exceed a bank is 12.5 times its equity. What about our banks to French? What is it for U.S. banks shamed when the 2008 crisis? What are good students who actually apply those criteria necessary for your money?
The debt ratio of French banks
These figures are from reports published by banks. I found them through two sites I recommend: blog Lupus, which analyzes the timeliness of Economy and Finance , led me through a link to the blog Jean-Pierre Chevallier, Business Economist . Figures are in billions.
| Name | Total debts | Equity Ratio | |
| Societe Generale | 1016 | 42.7 23.8 | |
| Credit Agricole | 1562 | 43.7 35.7 | |
| BNP Paribas | 2233 | 56.7 39.3 | |
| Lehman Brothers | 639.4 26.3 24.3 | ||
| Bank of America | 2 193.4 197.2 | 11.1 | |
| JP Morgan | 1 886.9 154.1 | 12.2 | |
| Citigroup | 1888, 6 | 140.8 13.4 |
How to read this table? The total debt of BNP Paribas, for example, represents more than 39 times the amount of equity! I remind you that the limit is not exceeded by 12.5 times! A total debts exceed GDP BNP Paribas of France, which is 2 000 billion. And our debt is itself about 74% of our GDP. The debts of France and its banks make me dizzy!
Americans did a cleanup with the crisis. Lehman Brothers was bankrupt because it did not meet the standards of banking prudence. It should clean up the U.S. banking system and measures were taken. Other U.S. banks comply with these standards as you can see in the picture. Why the French state intervenes not it?
Do you approach your banker for advice on managing your finances? Forget it because he does not know himself properly manage his own! Would you state that you learn in school to manage your money? This would at least be a skill that would help you throughout your life. But our state can not handle his money, he is also indebted. What do you think you learn? Last question: why the media do they speak as of the 3.4 billion profit made by BNP Paribas in 2009?
How to use this information to your finances?
There are banks in France, whose debt ratio is correct. These few small banks and local family. As the owner family has invested his money, it does not do anything or be in debt. Some banks operations in France also meet this criterion debt. Of course this criterion should not be the one to guide your choice. He serves on a first screening.
From my point of view, the basic rule is to not put all your eggs in one basket. Do not all your money in one bank. Besides the investment products offered by banks are rarely the best. For my part, I have a bank account for my current one for my short-term investments. My long-term investments are not in a bank but in specialized companies. Finally attention to the fact that large banks have many branches. Before you commit, check who owns ultimately the company that you intend to entrust your money. For example Boursorama Bank, whose costs are lowest, is a subsidiary of Societe Generale.
Is Your bank debt in a reasonable manner? What are you doing now that you have the information? What do you think of indebtedness of the major French banks and our state? And silence the media?
Credit: crcollins
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