U.S. Banks Exposure To Weak European Countries: $176B

With information from O Estado de Sao Paulo.

The biggest U.S. banks have a total of $176B in exposure to four European countries whose debt problems are of concern. According to a report by Barclays Capital, 73 large U.S. banks have exposure of $82B to Ireland, $68B to Spain, $18B to Greece and $8B to Portugal.

Concentration in the 10 largest banks

The report states that the level of exposure is relatively low and suggests that banks face limited risk because much of the amount has collaterals. "Most of this exposure, including secured transactions at low risk as repurchase agreements, is concentrated in the 10 largest U.S. banks.

"Overall, exposure to these four countries represents approximately 5% of total foreign exposure of U.S. banks,"

Only two major U.S. banks - JPMorgan Chase and Bank of New York Mellon - disclose exposure to each country. Citing the annual reports of banks, JPMorgan has $ 18.4B in exposure to Spain and BNY has $ 2.32B in exposure to Ireland.

"Concern about the credit of Ireland, Greece, Portugal and Spain is high," notes the report. "Lately it has affected the spreads of banks, which remain volatile and sensitive to the tolerance of the market risk,".

Although "The direct risk of large U.S. banks related to Ireland, Greece, Portugal and Spain to be modest," Barclays said that "the sovereign risk is regulatory risk supplanted as the main focus of the bondholders of the banks."