5 U.S. Banks have $40 Trillion Each in Derivatives
Posted by Currency Prophet on September 24, 2014 at 8:53pm
Sentinel Alerts For The Economic Collapse
9.24.14 – 5 U.S. Banks Each Have More Than 40 Trillion Dollars In Exposure To Derivatives
The big banks have sophisticated computer models which are supposed to keep the system stable and help them manage these risks.
The root cause wasn’t just the reckless lending and the excessive risk taking. The problem at the core was a lack of transparency. After Lehman’s collapse, no one could understand any particular bank’s risks from derivative trading and so no bank wanted to lend to or trade with any other bank. Because all the big banks’ had been involved to an unknown degree in risky derivative trading, no one could tell whether any particular financial institution might suddenly implode.