Risks relative to other banks

Extracts from Telegraph, 18/03/08 - Philip Aldrick:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/18/cnukbanks118.xml

UK lenders' share prices plunge on investors' fears of contagion - despite their relative safety.

The writedowns, of less than £2bn each, that have been taken by even the UK's most aggressive lenders, Barclays and Royal Bank of Scotland, have been tiny compared with the multi-billion dollar writedowns made at Merrill Lynch, Citigroup, Morgan Stanley and UBS

[The chart in the article shows that the percentage of toxic debt to tangible equity is highest for Barclays at 80% compared to, say RBS at 29% and HSBC at 7%. I do not know how reliable these figures are.]

[A table showing coreTier 1 equity ratios shows Barclays ratio at 5.6% compared to RBS 4.5% and HSBC at 7.8%.]

Barclays has an even larger credit market exposure to its tangible book value, but it specialised in selling such assets through its Barclays Capital operation and so is thought to have more sophisticated risk management.

The vulnerabilities of both Barclays and RBS leave them exposed to further sub-prime writedowns - looking increasingly likely given the constant deterioration in the value of money market assets.