# World strongest banks



## SkyFall (Jun 19, 2012)

*World's strongest banks*

http://www.bloomberg.com/news/2014-06-15/hang-seng-bank-tops-list-of-strongest-lenders.html

Wow Desjardins is second... didnt expect that!


----------



## Just a Guy (Mar 27, 2012)

They've obviously never used any of the Canadian banks...I wouldn't rate CIBC or RBC as good Canadian banks...


----------



## fatcat (Nov 11, 2009)

i have seen similar rankings with completely different banks in the list
like german banks, for example, are usually near the top
there's so many ways to create these lists that they're almost meaningless


----------



## gibor365 (Apr 1, 2011)

Just a Guy said:


> They've obviously never used any of the Canadian banks...I wouldn't rate CIBC or RBC as good Canadian banks...


What do you mean by "never used"?! Do you think they rate banks based on your checking account 

_Canadian Imperial Bank of Commerce ranked as the strongest bank in North America, and third strongest in the world for the second straight year by Bloomberg Markets magazine._


----------



## james4beach (Nov 15, 2012)

You have to take such rankings and scores with a grain of salt. The "strength" or safety of a bank is very much an art, and there's accounting trickery and sleight of hand involved.

I'll give two concrete examples. The first is what they're calling risk-weighted assets (RWA). This is a very heavily "managed" number, so a bank has a lot of flexibility in how they calculate this. There are hundreds of pages of complex banking rules that apply different risk categories to different assets (in fact, 616 pages for Basel III). So banks massage their RWA by choosing things that, according to the rules, carries lower risk. Sovereign debt is one example. So banks might load up on say Spanish bonds, which is advantageous in RWA sense.

Some regulators have suggested that RWA is so easily manipulated that measures like capital vs RWA is virtually meaningless. Yet capital vs RWA is the primary way we currently evaluate bank health.

Here's another example: Deutsche Bank. According to my own research, they're horribly undercapitalized. What happened with DB is that they are very low on Common Equity Tier 1 capital (CET1) which is the latest-and-greatest, best definition of safe capital.

But they got special permission from the German government to swap in other non-CET1 things and call it CET1. This boosts their apparent capitalization measure, making the bank appear safer. It's a big trick with state sponsorship.

RWA... capital trickery... special exemptions and local rules ... you can't trust the results. Who knows what state these banks are in!


----------



## Causalien (Apr 4, 2009)

I immediately think it is a bullshit list when I see CIBC up there. CIBC is one of the worst offenders during the MBS collapse. They are also the last one to report the extend of their damage amongst all the banks. Their numbers might look good now, but I cannot trust their management.


----------



## kcowan (Jul 1, 2010)

Causalien said:


> I immediately think it is a bullshit list when I see CIBC up there. CIBC is one of the worst offenders during the MBS collapse. They are also the last one to report the extend of their damage amongst all the banks. Their numbers might look good now, but I cannot trust their management.


CIBC has been described as the "f*ckup fairy because they always seem to be in the center of the latest disaster such as MBS.

I use them for my RRSPs but have not used them for many years for banking. But all that does not matter. What matters is whether I would invest in them and I would not.


----------



## james4beach (Nov 15, 2012)

Even insiders of banks have stated publicly that it's very difficult (or impossible) to know exactly what's going on inside a large bank.

The point they make is that modern leveraged finance, and derivatives, have become so complicated that nobody really knows the risk situation of any bank. There are surveys from banking professionals quoted inside this article, which is required reading for anyone thinking of "buying hot bank dividend stocks". *Basically, even bankers themselves don't have faith in a bank's ability to accurately report their financial numbers.*

The Atlantic: What's Inside America's Banks?

It's no different for large global banks including the Canadian giants; they all have the same issues in complexity and opacity of reporting. For instance RBC has $8 trillion notional derivatives off the books; you really think they're even capable of accurately modeling the risk for $8 trillion in largely OTC, largely illiquid derivatives? If they _have_ figured out how, they'd better patent the process because everyone in the same situation at JP Morgan, Deutsche Bank, etc are still scratching their heads


----------



## lonewolf (Jun 12, 2012)

Ratings need to be done without conflict of interest i.e., the bank not paying an agency to get a rating.

The first thing that should be done is get rid CDIC & giving the banks special tax treatment over credit unions. The free market would do a better job of keeping the banks strong, If the banks are not doing sound banking were not insured no one would lend them money.

Anyone that has any association with gold man sachs should be banned from working in government & or the banking system


----------



## kcowan (Jul 1, 2010)

lonewolf said:


> Anyone that has any association with goldman sachs should be banned from working in government & or the banking system


That would eliminate all the recent appointments! :stupid:


----------



## fatcat (Nov 11, 2009)

lonewolf said:


> Ratings need to be done without conflict of interest i.e., the bank not paying an agency to get a rating.
> 
> The first thing that should be done is get rid CDIC & giving the banks special tax treatment over credit unions. The free market would do a better job of keeping the banks strong, If the banks are not doing sound banking were not insured no one would lend them money.
> 
> Anyone that has any association with gold man sachs should be banned from working in government & or the banking system


the free market completely f***** thousands or millions of people which is why CDIC and FDIC were implemented

before CDIC and FDIC banks were going bust on a regular basis and there was no trust in banking at all

you want to combine opaque impenetrable accounting and vetting processes with the free market ? ... this is a recipe for a lot of broke and destitute middle class canadians

(and a lot of money in gold and stuffed under mattresses)


----------



## lonewolf (Jun 12, 2012)

SkyFall said:


> http://www.bloomberg.com/news/2014-06-15/hang-seng-bank-tops-list-of-strongest-lenders.html
> 
> Wow Desjardins is second... didnt expect that!


 The rating do not mean much when the track record is not shown for the strength ratings they gave for banks that went bust in the past. I trust WEISS ratings more @ least they show their track record of strength rating one year before & @ the time the financial institution failed.


----------



## HaroldCrump (Jun 10, 2009)

Deutsche Bank is #21st most strongest bank in the world...this is hilarious.


----------



## Nemo2 (Mar 1, 2012)

HaroldCrump said:


> Deutsche Bank is #21st most strongest bank in the world...this is hilarious.


http://www.dw.de/moodys-downgrades-deutsche-bank-as-lenders-net-profit-falls/a-17816791


----------

