by Marc Chandler
Marc to Market
This Great Graphic was posted by Benn Steil and Dinah Walker from the Council on Foreign Relations. It shows numerous countries’ bank exposures to Russia. It is based on data from the Bank for International Settlements.
Steil and Walker’s point is that while the US, German, UK, and Swedish banks cut back on exposure to Russia in Q4 2013, French banks did not very much. France’s $50 bln is by far the greatest exposure. Moreover, they note that a good part of France’s exposure is illiquid as it is in the form of Soc Gen’s ownership stake of Russia’s 9th largest bank Rosbank, worth about $22 bln. Steil and Walker muse that maybe US money markets and other investors should re-evaluate their exposures to French banks.
This may be a good place to begin, but not to finish. The situation is more complicated. For example, noticeable by its absence from the Steil/Walker chart and discussion is Austria. Austria banks have relied on expansion to eastern and central Europe, including Russia. Fitch argues that Austrian banks, not French bank are most exposed to Russia. The primary channel is their local subsidiaries.