This is quite intesting. Responding to unprecedented instability and turmoil in the global banking industry, in late Feb the Global Finance magazine published a mid-year update of its top 50 list of banks it considers to be the safest. Usually its update is done yearly.

The top  50 list can be found here.

The key two reservations I have about the method of scoring used are as follows:

  • it still relies on credit ratings such as S&P and Moody’s – which as we only know too well can be plain wrong, toxic “credit-tranche-derivative-style”; and
  • we still don’t know the exact level of global exposure to potential losses liabilities which banks are presently carrying on their books.

However since  the assessment is done with reference to total assets of banks, then typically, the more assets banks hold, the greater the chance there will be a large proportion of good quality assets. This would mean that such large banks tend to be better capitalised to withstand future losses and are thus likelier to be safer.

 

Copyright 2009 by CuriouslyInspired

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