The $100 billion question - Signal Lake Venture Fund

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ANNEX Table 1: Present value of output losses (% of 2009 GDP) Fraction of initial output loss which is permanent 25% 50% 100% UK 130 260 520 World 90 170 350 Source: Bank calculations Table 2: Average ratings difference for a sample of banks and building societies 2007 2008 2009 Average (2007–09) UK 1.56 1.94 4.00 2.50 Global 1.68 2.36 2.89 2.31 Average 1.63 2.21 3.24 2.36 1. All figures are year-end 2. The UK sample contains 16 banks and building societies in 2007 and 2008 and 13 in 2009. The global sample contains a sample of 26 banks across a range of sizes and countries for 2007 and 28 banks in 2008 and 2009. Source: Moody’s and Bank calculations. Table 3: Average ratings difference for UK banks and building societies (a) Category Mean Max difference in sample Min difference in sample 2007 Large banks 2.67 12 1 Small banks 0.14 1 0 2008 Large banks 2.78 10 1 Small banks 0.86 2 0 2009 Large banks 4.67 7 3 Small banks 3.43 6 0 Average (2007–2009) Large banks 3.37 10 2 Small banks 1.48 3 0 (a) The ‘Large’ category includes HSBC, Barclays, RBS, Lloyds TSB, Alliance & Leicester and Bradford & Bingley (up to 2008), and Nationwide. The ‘Small’ category includes building societies: Chelsea, Coventry, Leeds, Principality, Skipton, West Bromwich and Yorkshire. The ratings are year-end. Source: Moody’s and Bank calculations. 24
Table 4: Estimated subsidy for UK banks and building societies (£bn) and global banks ($bn) 2007 2008 2009 Average (2007–09) Subsidy Subsidy / Total liabilities Subsidy Subsidy / Total liabilities Subsidy Subsidy / Total liabilities Subsidy Subsidy / Total liabilities UK Big 5 Medium Small Sample Total 11 59 107 59 Total 9 52 103 55 Average 2 0 10 1 26 2 13 1 Total 1 7 3 4 Average 0 0 3 3 3 2 2 2 Total 0 1 1 1 Average 0 0 0 1 0 1 0 1 Global Big 5 Sample Total 37 220 250 169 Total 18 83 71 57 Average 4 0 17 1 14 1 12 1 See footnotes for tables 2 and 3 for details on sample. Source: Moody’s, Bank of America Merrill Lynch, Bankscope published by Bureau van Dijk Electronic Publishing and Bank calculations Chart 1: Average assets relative to GDP of US commercial banks (a) 0.014 Average Assets per Commercial Bank as a a percentage of Nominal GDP 0.012 0.010 0.008 0.006 0.004 0.002 0.000 1934 1938 1942 1946 1950 1954 1958 1962 1966 1970 1974 Year 1978 1982 1986 1990 1994 1998 2002 2006 Average Asset Size of Commercial Banks scaled by Nominal GDP (a) Blue vertical line represents the 1982 Garn-St Germain Act, green vertical line represents the 1994 Riegle-Neal Act, red vertical line represents the Riegle-Neal Act coming into effect in 1997. Source: FDIC and www.measuringworth.org 25
Page 1 and 2: THE $100 BILLION QUESTION Andrew G
Page 3 and 4: There is a large literature measuri
Page 5 and 6: Second, this ratings difference has
Page 7 and 8: In making these choices, economists
Page 9 and 10: Against this economic backdrop, and
Page 11 and 12: 1960s, computers were highly integr
Page 13 and 14: the relationship is positively slop
Page 15 and 16: exogenous, even these events have b
Page 17 and 18: Experience in the US following the
Page 19 and 20: contracts - the financial equivalen
Page 21 and 22: References Aikman, D, Barrett, P, K
Page 23: Santomero, A M and D L Eckles (2000
Page 27: Chart 4: Bank size and volatility C

The $100 billion question - Signal Lake Venture Fund

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