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British banks have also increased their exposure to China in recent years.
Moreover, as we all know, the crisis has been compounded by the banks' so-called risk-management models, which increased their exposure to risk instead of limiting it and rendered the global economic system more fragile than ever.
As Spain and Italy grapple with downturns amid deep spending cuts and tax increases intended to cut high deficits, "a further deterioration of the fundamental news would prove particularly toxic, now that banks have increased their exposure," the note said.
And Spanish banks increased their exposure to the Fragile Five by 26% to $185bn, while chopping their peripheral exposure (ex Spain) by 29% to $105bn.Three points are worth emphasising.
The cost of gas and acquiring a license might have kept some teenagers off the roads during more troubled economic times, he said, but as the economy improved, more teenagers might have started to drive, which would have increased their exposure to risk.
"They've increased their exposure to real estate from 10 to 15 percent to 15 to 30 percent" of their overall portfolios, Mr. Young said, adding, "If you can buy real estate at or just slightly above replacement cost, that is a screaming buy for these clients.
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Banks and hedge funds have increased their exposures most to those markets that they are least able to withdraw from.
However, U.S. banks increased their exposures to Argentina by almost 43%; Argentina is only less than half a percent of U.S. banks foreign exposures.
Also, of note is that despite Italy's economic woes, U.S. banks have increased their exposures to Italy by 17%; fortunately, those exposures are less than 2% of U.S. banks total foreign exposures.
Even eurozone banks have been increasing their exposure compared to the low points of 2012.
Moreover, demand for such investments has been lukewarm, a sign that few traders are willing to increase their exposure.
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