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They remain leveraged up to their eyeballs; remain "too big to fail" and too inter-connected to each other so most can't be allowed to go bust.
But because Europe took only a fraction — one eighth — of the action– that America took to recapitalize and write off rotten assets, its banks today are still poisoned by their high levels of debt (German banks today remain leveraged 32 times their size, and French banks 26 times).
Banks want to remain leveraged at 20 to 30 to one, debt and deposits to equity, once you count all their assets and not just what they call "at risk" assets.
Similar(57)
"All our major banks remain highly leveraged," Mr. King said.
Many banks in Europe and the United States remain heavily leveraged and dependent on central bank support, the B.I.S. said in its annual report.
European banks remain highly leveraged and will not be able to substantially step up lending until they have further reduced risk, said Stephen Cecchetti, head of the monetary and economic department at the Bank for International Settlements, which acts as a clearinghouse for the world's central banks and released its quarterly report late Sunday.
They remain excessively leveraged".
If banks remain highly leveraged, additional approaches must be found to address "too big to fail" distortions.
First, distance learning, online education and training, and other technology-enabled solutions aimed at corporations and consumers is picking up, but they remain an under-leveraged opportunity.
Investors should remain wary of "highly leveraged entities or businesses in weak competitive positions," Buffett wrote, but fear over the long-term prosperity of sound companies "makes no sense".
The research firm cited strength in traffic, stable keyword pricing and expected improvements in monetization, and added, "We believe Google will remain the company most leveraged to the growth in online advertising".
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