Our banks, 44th safest in the world? Really?
Thanks to Tony Bonsignore | 08:35:42 | 10 October 2008 for this
If you worry about our banks being up the solvency creek without a capital paddle, then you should see what the rest of the world thinks of them.
According to the latest World Economic Forum survey, UK banks were deemed only 44th best in the world in terms of their soundness.
On a scale of 1 to 7 - with 1 indicating ‘insolvent and may require a government bailout’, and 7 representing ‘generally healthy with sound balance sheets’ - Britain apparently scored 6.0.
6.0! A great score in figure skating, certainly, but a poor-to-rubbish one for banks in a developed, G7 economy.
Just listen to the banks immediately above the UK in the list: El Salvador, Peru, Lithuania - even the United States, for goodness’ sake.
No offence meant to these great nations, of course, who if they ever read this would probably be mortified to hear their banks mentioned in the same breath as our broken behemoths.
Of course this survey was undertaken well before the recent blow up, which may account for Ireland’s bizarre positioning at number 9. And before you ask, Iceland comes in at number 36, a full eight places ahead of the UK.
So then, is the rest of the world right to consider our banks a little less safe than those in emerging Latin America or Eastern Europe? Indeed, are they even that safe any more, given this week’s events?
On a scale of 1 to 7 (7 being ‘solvent and healthy’ and 1 being ‘in a terminal state’) - where would you now place our banks