{"id":1662,"date":"2011-10-31T02:12:17","date_gmt":"2011-10-31T06:12:17","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=1662"},"modified":"2011-10-31T02:12:17","modified_gmt":"2011-10-31T06:12:17","slug":"europes-dying-bank-model-gene-frieda-project-syndicate","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2011\/10\/31\/europes-dying-bank-model-gene-frieda-project-syndicate\/","title":{"rendered":"Europe\u2019s Dying Bank Model &#8211; Gene Frieda &#8211; Project Syndicate"},"content":{"rendered":"<p>In general, the eurozone has outsized banks (assets equivalent to 325% of GDP) that are highly leveraged (the 15 largest banks\u2019 leverage is 28.9 times their equity capital). They are also dependent on large quantities of wholesale debt \u2013 totaling \u20ac4.9 trillion (27% of total eurozone loans), with \u20ac660 billion maturing in the next two years \u2013 to fund low-yielding assets. According to Barclays Capital, the 15 largest banks increased their returns on equity by 58% between 1998 and 2007, with 90% of the gain coming from higher leverage. Returns have since collapsed.<\/p>\n<p>This model\u2019s viability depends on large amounts of cheap leverage, supported by implicit government backing.<\/p>\n<p>via <a href=\"http:\/\/www.project-syndicate.org\/commentary\/frieda2\/English\">Europe\u2019s Dying Bank Model &#8211; Gene Frieda &#8211; Project Syndicate<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In general, the eurozone has outsized banks (assets equivalent to 325% of GDP) that are highly leveraged (the 15 largest banks\u2019 leverage is 28.9 times their equity capital). They are also dependent on large quantities of wholesale debt \u2013 totaling \u20ac4.9 trillion (27% of total eurozone loans), with \u20ac660 billion maturing in the next two &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2011\/10\/31\/europes-dying-bank-model-gene-frieda-project-syndicate\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Europe\u2019s Dying Bank Model &#8211; Gene Frieda &#8211; Project Syndicate&#8221;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[31,33],"tags":[381,590,649,962,1295,3683],"class_list":["post-1662","post","type-post","status-publish","format-standard","hentry","category-the-fed-banks-interest-rates","category-uk-europe-countries-regions","tag-banks","tag-capital-ratios","tag-cheap-leverage","tag-debt-crisis","tag-euro-zone","tag-wholesale-debt"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Europe\u2019s Dying Bank Model - Gene Frieda - Project Syndicate - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Europe\u2019s Dying Bank Model - Gene Frieda - Project Syndicate - the patient investor\" \/>\n<meta property=\"og:description\" content=\"In general, the eurozone has outsized banks (assets equivalent to 325% of GDP) that are highly leveraged (the 15 largest banks\u2019 leverage is 28.9 times their equity capital). They are also dependent on large quantities of wholesale debt \u2013 totaling \u20ac4.9 trillion (27% of total eurozone loans), with \u20ac660 billion maturing in the next two &hellip; Continue reading &quot;Europe\u2019s Dying Bank Model &#8211; Gene Frieda &#8211; Project Syndicate&quot;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/thepatientinvestor.com\/index.php\/2011\/10\/31\/europes-dying-bank-model-gene-frieda-project-syndicate\/\" \/>\n<meta property=\"og:site_name\" content=\"the patient investor\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/profile.php?id=61572934660810\" \/>\n<meta property=\"article:published_time\" content=\"2011-10-31T06:12:17+00:00\" \/>\n<meta name=\"author\" content=\"ColinTwiggs\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"ColinTwiggs\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2011\\\/10\\\/31\\\/europes-dying-bank-model-gene-frieda-project-syndicate\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2011\\\/10\\\/31\\\/europes-dying-bank-model-gene-frieda-project-syndicate\\\/\"},\"author\":{\"name\":\"ColinTwiggs\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#\\\/schema\\\/person\\\/cb072791ac83e8bae585007c133d54a5\"},\"headline\":\"Europe\u2019s Dying Bank Model &#8211; Gene Frieda &#8211; Project Syndicate\",\"datePublished\":\"2011-10-31T06:12:17+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2011\\\/10\\\/31\\\/europes-dying-bank-model-gene-frieda-project-syndicate\\\/\"},\"wordCount\":119,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#organization\"},\"keywords\":[\"banks\",\"capital ratios\",\"cheap leverage\",\"debt crisis\",\"euro-zone\",\"wholesale debt\"],\"articleSection\":[\"Banks &amp; Interest Rates\",\"UK &amp; Europe\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2011\\\/10\\\/31\\\/europes-dying-bank-model-gene-frieda-project-syndicate\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2011\\\/10\\\/31\\\/europes-dying-bank-model-gene-frieda-project-syndicate\\\/\",\"url\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2011\\\/10\\\/31\\\/europes-dying-bank-model-gene-frieda-project-syndicate\\\/\",\"name\":\"Europe\u2019s Dying Bank Model - Gene Frieda - Project Syndicate - the patient investor\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#website\"},\"datePublished\":\"2011-10-31T06:12:17+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2011\\\/10\\\/31\\\/europes-dying-bank-model-gene-frieda-project-syndicate\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2011\\\/10\\\/31\\\/europes-dying-bank-model-gene-frieda-project-syndicate\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2011\\\/10\\\/31\\\/europes-dying-bank-model-gene-frieda-project-syndicate\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/thepatientinvestor.com\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Europe\u2019s Dying Bank Model &#8211; Gene Frieda &#8211; Project Syndicate\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#website\",\"url\":\"https:\\\/\\\/thepatientinvestor.com\\\/\",\"name\":\"The Patient Investor\",\"description\":\"Smart. Strategic. Unfiltered. \",\"publisher\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/thepatientinvestor.com\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#organization\",\"name\":\"The Patient Investor Pty Ltd\",\"url\":\"https:\\\/\\\/thepatientinvestor.com\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/i0.wp.com\\\/thepatientinvestor.com\\\/wp-content\\\/uploads\\\/2026\\\/03\\\/cropped-cropped-patience-bg-1-inverted-400x400-1.png?fit=250%2C250&ssl=1\",\"contentUrl\":\"https:\\\/\\\/i0.wp.com\\\/thepatientinvestor.com\\\/wp-content\\\/uploads\\\/2026\\\/03\\\/cropped-cropped-patience-bg-1-inverted-400x400-1.png?fit=250%2C250&ssl=1\",\"width\":250,\"height\":250,\"caption\":\"The Patient Investor Pty Ltd\"},\"image\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"https:\\\/\\\/www.facebook.com\\\/profile.php?id=61572934660810\",\"https:\\\/\\\/www.instagram.com\\\/colin_thepatientinvestor\"]},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#\\\/schema\\\/person\\\/cb072791ac83e8bae585007c133d54a5\",\"name\":\"ColinTwiggs\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/876c4d990bb2af282291d5f3ff81533c6deccc0c607846086647ca3272fac0ca?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/876c4d990bb2af282291d5f3ff81533c6deccc0c607846086647ca3272fac0ca?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/876c4d990bb2af282291d5f3ff81533c6deccc0c607846086647ca3272fac0ca?s=96&d=mm&r=g\",\"caption\":\"ColinTwiggs\"},\"url\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/author\\\/colin58s\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Europe\u2019s Dying Bank Model - Gene Frieda - Project Syndicate - the patient investor","robots":{"index":"noindex","follow":"follow"},"og_locale":"en_US","og_type":"article","og_title":"Europe\u2019s Dying Bank Model - Gene Frieda - Project Syndicate - the patient investor","og_description":"In general, the eurozone has outsized banks (assets equivalent to 325% of GDP) that are highly leveraged (the 15 largest banks\u2019 leverage is 28.9 times their equity capital). They are also dependent on large quantities of wholesale debt \u2013 totaling \u20ac4.9 trillion (27% of total eurozone loans), with \u20ac660 billion maturing in the next two &hellip; Continue reading \"Europe\u2019s Dying Bank Model &#8211; Gene Frieda &#8211; Project Syndicate\"","og_url":"https:\/\/thepatientinvestor.com\/index.php\/2011\/10\/31\/europes-dying-bank-model-gene-frieda-project-syndicate\/","og_site_name":"the patient investor","article_publisher":"https:\/\/www.facebook.com\/profile.php?id=61572934660810","article_published_time":"2011-10-31T06:12:17+00:00","author":"ColinTwiggs","twitter_card":"summary_large_image","twitter_misc":{"Written by":"ColinTwiggs","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/thepatientinvestor.com\/index.php\/2011\/10\/31\/europes-dying-bank-model-gene-frieda-project-syndicate\/#article","isPartOf":{"@id":"https:\/\/thepatientinvestor.com\/index.php\/2011\/10\/31\/europes-dying-bank-model-gene-frieda-project-syndicate\/"},"author":{"name":"ColinTwiggs","@id":"https:\/\/thepatientinvestor.com\/#\/schema\/person\/cb072791ac83e8bae585007c133d54a5"},"headline":"Europe\u2019s Dying Bank Model &#8211; Gene Frieda &#8211; Project Syndicate","datePublished":"2011-10-31T06:12:17+00:00","mainEntityOfPage":{"@id":"https:\/\/thepatientinvestor.com\/index.php\/2011\/10\/31\/europes-dying-bank-model-gene-frieda-project-syndicate\/"},"wordCount":119,"commentCount":0,"publisher":{"@id":"https:\/\/thepatientinvestor.com\/#organization"},"keywords":["banks","capital ratios","cheap leverage","debt crisis","euro-zone","wholesale debt"],"articleSection":["Banks &amp; Interest Rates","UK &amp; Europe"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/thepatientinvestor.com\/index.php\/2011\/10\/31\/europes-dying-bank-model-gene-frieda-project-syndicate\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/thepatientinvestor.com\/index.php\/2011\/10\/31\/europes-dying-bank-model-gene-frieda-project-syndicate\/","url":"https:\/\/thepatientinvestor.com\/index.php\/2011\/10\/31\/europes-dying-bank-model-gene-frieda-project-syndicate\/","name":"Europe\u2019s Dying Bank Model - Gene Frieda - Project Syndicate - the patient investor","isPartOf":{"@id":"https:\/\/thepatientinvestor.com\/#website"},"datePublished":"2011-10-31T06:12:17+00:00","breadcrumb":{"@id":"https:\/\/thepatientinvestor.com\/index.php\/2011\/10\/31\/europes-dying-bank-model-gene-frieda-project-syndicate\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/thepatientinvestor.com\/index.php\/2011\/10\/31\/europes-dying-bank-model-gene-frieda-project-syndicate\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/thepatientinvestor.com\/index.php\/2011\/10\/31\/europes-dying-bank-model-gene-frieda-project-syndicate\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/thepatientinvestor.com\/"},{"@type":"ListItem","position":2,"name":"Europe\u2019s Dying Bank Model &#8211; Gene Frieda &#8211; Project Syndicate"}]},{"@type":"WebSite","@id":"https:\/\/thepatientinvestor.com\/#website","url":"https:\/\/thepatientinvestor.com\/","name":"The Patient Investor","description":"Smart. 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Europe&quot;","block_context":{"text":"UK &amp; Europe","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/uk-europe-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10378,"url":"https:\/\/thepatientinvestor.com\/index.php\/2014\/07\/21\/jon-cunliffe-the-role-of-the-leverage-ratio\/","url_meta":{"origin":1662,"position":1},"title":"Jon Cunliffe: The role of the leverage ratio&#8230;.","author":"ColinTwiggs","date":"July 21, 2014","format":false,"excerpt":"Sir Jon Cunliffe, Deputy Governor for Financial Stability of the Bank of England, argues that the leverage ratio -- which ignores risk weighting when calculating the ratio of bank assets to tier 1 capital -- is a vital safeguard against banks' inability to accurately model risk: ..... while the risk-weighted\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":38666,"url":"https:\/\/thepatientinvestor.com\/index.php\/2022\/11\/09\/national-australia-bank-ltd-nab\/","url_meta":{"origin":1662,"position":2},"title":"National Australia Bank Ltd (NAB)","author":"Colin Twiggs","date":"November 9, 2022","format":false,"excerpt":"Stock: National Australia Bank Ltd Exchange: ASX Symbol: NAB Date: 9-Nov-22 Latest price: A$31.66 Market Cap: A$99.8 bn Fair Value: A$29.67 Forward DY: 4.6% Payback (Years): 13 Financial Y\/E: 30-Sep-23 Rating: HOLD Sector: Financial Industry: Banks Investment Theme: Dividends & Growth Macro Trends: Defensive Summary National Australia Bank Ltd (NAB)\u2026","rel":"","context":"In &quot;Australian Growth&quot;","block_context":{"text":"Australian Growth","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/investment-allocation\/asx-growth\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":16000,"url":"https:\/\/thepatientinvestor.com\/index.php\/2017\/10\/06\/australian-banks-under-selling-pressure\/","url_meta":{"origin":1662,"position":3},"title":"Australian banks under selling pressure","author":"Colin Twiggs","date":"October 6, 2017","format":false,"excerpt":"The ASX 300 Banks index are a major drag on the broad market index. Having respected resistance at 8500, a test of primary support at 8000 is likely. Twiggs Trend Index peaks below zero warn of strong selling pressure. Return on equity is falling. A combination of narrow interest margins.\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5392,"url":"https:\/\/thepatientinvestor.com\/index.php\/2012\/09\/05\/simon-johnson-why-are-the-big-banks-suddenly-afraid-nytimes-com\/","url_meta":{"origin":1662,"position":4},"title":"Simon Johnson: Why Are the Big Banks Suddenly Afraid? &#8211; NYTimes.com","author":"Colin Twiggs","date":"September 5, 2012","format":false,"excerpt":"The threat of too-big-to-fail banks has not diminished. The combined assets of the 6 largest US banks is bigger now than in 2008. Simon Johnson, Professor of Entrepreneurship at M.I.T. Sloan School of Management, writes: A growing number of serious-minded politicians are starting to support the point made by Jon\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14537,"url":"https:\/\/thepatientinvestor.com\/index.php\/2016\/11\/19\/kash-call-the-economist\/","url_meta":{"origin":1662,"position":5},"title":"Neel Kashkari: How to fix the banks | The Economist","author":"ColinTwiggs","date":"November 19, 2016","format":false,"excerpt":"[Neel Kashkari, head of Minneapolis Fed] is an experienced financial firefighter. An alumnus of Goldman Sachs, best-connected of investment banks, he spent much of 2008 and 2009 in the Treasury department overseeing the Troubled Asset Relief Programme, under which the American government bought more than $400bn of toxic assets to\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/1662","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=1662"}],"version-history":[{"count":0,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/1662\/revisions"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=1662"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=1662"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=1662"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}