Switzerland’s non-exposure to Greece

By Felix Salmon
April 30, 2010
Brian Blackstone has this great little chart, which shows Switzerland's $79 billion of exposure falling by 95% between the third and fourth quarters. He's got to the bottom of what exactly happened, too. And it has nothing whatsoever to do with CDS:

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exposure.gifRemember all those Swiss banks with massive exposure to Greece? Er, never mind. The WSJ’s Brian Blackstone has* this great little chart, which shows Switzerland’s $79 billion of exposure falling by 95% between the third and fourth quarters. He’s got to the bottom of what exactly happened, too. And it has nothing whatsoever to do with CDS:

Eurobank EFG is based in Athens, listed on the Athens stock exchange and has roughly 1,600 branches in Greece and other countries in Central, Eastern and Southern Europe. It is controlled by EFG Group, a holding company that is indirectly controlled by the billionaire Latsis family of Greece.

Until recently, EFG Group had its headquarters in Switzerland…

It is unlikely that the bank posed any significant financial risk to Switzerland. Like all Greek banks, its deposits are insured by the Greek government.

Eurobank EFG’s exposure was classified as Swiss because its parent company was based in Switzerland. In the fourth quarter, the parent company underwent a restructuring; EFG Group is now based in Luxembourg but not classified as a bank there.

It seems that the BIS itself is in dire need of moving from a rules-based to a principles-based regime. EFG is a Greek bank, it was always a Greek bank, and it should always have been reported as such. If some narrow-minded bureaucrat decided that the rules meant that it had to be reported as Swiss, then obviously the BIS should have changed the rules. It’s worth asking why that never happened.

Update: Reuters had it first. And I think, although BIS statistics are very confusing, that what we’re looking at here is double-counting: EFG showing up in both the Greece and the Switzerland statistics. Until Q4, at which point it was just Greece.

Update 2: Or maybe Alphaville had it first.

5 comments

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Does this mean that $75 billion in Greek exposure has just disappeared into a non-Swiss non-bank?

Posted by MattF | Report as abusive

“There’s a suspicious hole in international banking. Interpol’s looking into it.”

The Swiss may deny connections between the gnomes of Zürich, the caymans of Lehman, wildebeests of Goldman and the moles of Magnetar, but I’m not buying their side of the story.

Posted by HBC | Report as abusive

The Swiss are so sneaky, who knows what the truth is with those banks

Posted by STORYBURNcom_0 | Report as abusive

HSBC, the hole is better than the sum of the parts, Interpol finds itself in the hole.

This article is like a wormhole in Swiss cheese, from BS to BIS, back to BS.

Posted by Ghandiolfini | Report as abusive

Not surprisingly, our 5 senses correlate with our needs for clean food, clean water, safety and reproduction. The senses of touch, smell, taste, sound, and of sight. These are resource based research, tools. We are all researchers in our own right.

The planet provides the resources and our survival is a testament to a high functioning, ability to find and use these resources. We get together and passionately volunteer our time and energy to promote the freedom of the next breath.

Funny, no sense of an on going monetary computation, required to sustain life? Somewhere along the way we picked up this parasite that promotes, taxation, indebtedness, aggression greed…etcetera, etcetera, U could help me fill many pages. The evidence shows, as reported world wide, in many, languages, that this monetary system threatens our freedom.
When a parasite is found do U promote, regulate or “fix” it?… or eliminate and replace with a resource based, system, that we are designed to deal with.

Posted by evolutis | Report as abusive