The Office of the Comptroller of the Currency (OCC) has released the Derivatives Exposure for bank holding companies. https://www.occ.gov/topics/capital-markets/financial-markets/derivatives/dq416.pdf
Of the top ten bank holding companies, Citigroup leads in total derivatives exposure (futures, options, forwards, swaps, credit derivatives, etc). Citi is closely followed by JPMorgan Chase, Goldman Sachs, Bank of America and Morgan Stanley.
In terms of derivative exposure to assets, Japan’s Mizuho leads with a whopping 12,136.54%. Followed by Goldman Sachs at 4,792.91% and Morgan Stanley at 3,505.69%. Wells Fargo is has the lowest derivatives to assset ratio of the top ten holding companies.
Liquidity moves markets!Click here to learn how you can follow the money.
In terms of credit derivatives, JPMorgan Chase leads, followed by Citi. State Street actually has no credit risk exposure.
Of course, as long as there is no sudden shock (or even slow m0ving disaster … like collapsing home prices and a surge in mortgage defaults), everything is copacetic. But in case of a shock, counter party risk rears its head (such as in ‘The Big Short” where problems occured in shorting Credit Default Swaps, at least momentarily). Or an insurer like AIG not being to pay off on its Credit Default Swaps claims.
Now that the US banking system is highly concentrated,
we shouldn’t see the same pattern of bank failures that we have seen in previous financial crises, like the financial crisis of 2007-2012.
Did someone mention Stanley? With a derivative-to-asset ratio of 3.505%, (Morgan) Stanley should be happy!
Wall Street Examiner Disclaimer:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I am also a contractor for Money Map Press, publisher of Money Morning, Sure Money, and other information products. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. In some cases promotional consideration is paid on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.