A short number of years ago the “too big to fail banks” had to be bailed out with trillions of dollars in financial aid from both the taxpayers and the Federal Reserve. At one point there were serious discussions about nationalizing the entire U.S. banking industry.
As a sign of how rapidly America’s largest banks have recovered from the 2008 financial meltdown, Bloomberg includes two U.S. banks on its list of “The World’s Strongest Banks.”
To identify the world’s strongest banks, Bloomberg took into account numerous factors including Tier 1 capital to risk-weighted assets, loan loss reserve to nonperforming loans, nonperforming assets to total assets, deposits funding ratio and the efficiency ratio.
Only two U.S. banks qualified for inclusion on the world’s strongest banks list. Citigroup, which looked like a failed bank not that long ago, wound up in the number nine slot while JP Morgan came in as the 15th strongest bank. The world’s strongest bank in the number one position was Qatar National Bank, located in the Qatar, a tiny Persian Gulf nation whose citizens have the highest per capita wealth in the world.
Interesting also is the fact that of the world’s top ten strongest banks, four of them are located in Canada and three of them are based in Singapore.
Considering that the combined GDP of the Eurozone makes it the second largest economy in the world, it is remarkable that not one European bank was on the list of the world’s strongest banks. Remarkable until you consider that most of the Eurozone is in a deep recession/depression and most of their largest banks are either insolvent or needing bailouts or bailins. Will any of Europe’s banks show up on a future list of the strongest banks? Europe’s economic problems seem intractably at the moment but then again, so did ours during the depths of the banking crisis.
