U.S. Banks Tally Their Exposure to Europe's Debt Maelstrom

BANKS INSURED OVER EUROPEAN EXPOSURE - NYT’s Peter Eavis: “After a hurricane, homeowners check nervously to see if their insurance will cover all of their damages. With the European financial crisis still threatening a trail of defaults, United States banks are betting that their insurance is going to pay out. Five large American banks, including JPMorgan Chase and Goldman Sachs, have more than $80 billion of exposure to Italy, Spain, Portugal, Ireland and Greece ... according to a New York Times analysis of the banks’ financial disclosures. But these banks have made extensive use of a type of financial insurance, called credit-default swaps, to help them offset any losses that might occur if defaults swamped the five troubled nations. Using these swaps, along with other measures, the five banks have cut their theoretical exposure to the troubled countries by $30 billion, to $50 billion.”

 U.S. Banks Tally Their Exposure to Europe's Debt Maelstrom - NYTimes.com