i posted this one before but not many read it. Bomb ticking for...

i posted this one before but not many read it.


Bomb ticking for off-balance banks

Australian banks have a big exposure to derivative markets. Their total shareholder value of $110 billion is dwarfed by the size of the banks' collective exposure to derivative markets of $12.9 trillion.

Put simply, the total derivative positions of the banks are 117 times as big as the banks' shareholder value. If even 1 per cent of these derivatives contracts default because third parties at the other end get into trouble, the whole shareholder wealth would be wiped out and our banks could be broke.
http://www.theaustralian.news.com.au/story/0,,23229288-7583,00.html