Fitch has released a comprehensive study on derivatives held by various corporations and has come out with some disturbing results: the bulk of the derivative risk is concentrated not merely in the "financial company" category (99.7%) but in a subset of just five companies, which account for an "overwhelming majority" of derivative assets and liabilities.
The companies in question (Total Notional Derivatives: Assets & Liabilities, $ in Trillions)
· JP Morgan:$81.7;
· Bank of America:$80.0;
· Citigroup:$31.5;
· Morgan Stanley:$39.3, and of course
· Goldman Sachs: $47.8 (this is an OCC estimate: Goldman has not disclosed notional amounts in their derivative book, only # of contracts);
If you want a preview of what the Basel III definition of "Too Big To Fail" will look like, the above five companies is a great place to start.
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The companies in question (Total Notional Derivatives: Assets & Liabilities, $ in Trillions)
· JP Morgan:$81.7;
· Bank of America:$80.0;
· Citigroup:$31.5;
· Morgan Stanley:$39.3, and of course
· Goldman Sachs: $47.8 (this is an OCC estimate: Goldman has not disclosed notional amounts in their derivative book, only # of contracts);
If you want a preview of what the Basel III definition of "Too Big To Fail" will look like, the above five companies is a great place to start.
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