A world map of who is indebted to who

robp

Here is an impressive graphic I came across revealing the intertwined network of debt which Ireland is caught up in. Its not new but it really makes the crisis in the financial world so clear.

http://nyti.ms/oztC1U.

RichardAnd

Interesting that that graph counts in trillions

johnnyskeleton

A good illustration of how Ireland, Greece and Portugal get a disproportionate amount of coverage seeing as they are insignificant compared to Germany, Japan, the US and China.

liammur

johnnyskeleton wrote: »

A good illustration of how Ireland, Greece and Portugal get a disproportionate amount of coverage seeing as they are insignificant compared to Germany, Japan, the US and China.

You would have to expect countries like Greece and Ireland to feature heavily. This is where the problem starts. A greek default and the debt chain reaction swings into place.

Scofflaw

It's worth pointing out that it should be read with a great deal of care, because the figures are BIS inter-banking figures. It therefore doesn't distinguish between debt owed by offshore entities to their parents and debt owed between entirely separate entities.

Our German debt, for example, is primarily owed by IFSC-based subsidiaries to their German parent banks.

cordially,
Scofflaw

1huge1

I realise this was published on the October 22, 2011 but I'm not sure how up to date those figures are.

MadsL

Is the UK > Ireland relationship off?? Doesn't seem to make sense...

http://www.belfasttelegraph.co.uk/news/local-national/uk/uk-loans-ireland-325bn-15031427.html

antoobrien

MadsL wrote: »

Is the UK > Ireland relationship off?? Doesn't seem to make sense...

http://www.belfasttelegraph.co.uk/news/local-national/uk/uk-loans-ireland-325bn-15031427.html

It doesn't (seem) to take into account sovereign loans (like the one you mentioned), just banking loans.

Scofflaw

antoobrien wrote: »

It doesn't (seem) to take into account sovereign loans (like the one you mentioned), just banking loans.

That's because that's what the BIS figures are. The problem for journalists in this debt crisis is that they want to be able to show who owes what and to whom by country, because that's what the readers want to know. The Basel Bank of International Settlements issue stats that show inter-bank figures broken down by country in one convenient package, so they're extremely convenient.

Unfortunately, they don't actually mean what the journalists usually present them as. They're just banking loans, and while they're broken down by country, they don't differentiate between debt owed by offshore entities to their parents and debt owed between entirely separate entities.

As a result, any country with a large offshore banking hub - such as Ireland - shows up as owing large amounts to the countries whose banks have IFSC subsidiaries, even though that money has nothing to do with the Irish economy. German banks have Dublin-based subsidiaries in the IFSC which make loans into Germany - they're based here for our favourable tax rates and lax regulatory regime, but they're fundamentally just pipelines for German banks to lend to German customers.

And the IFSC offshore banking sector is roughly as large again as the entire domestic banking sector, which means that the figures for Ireland are virtually meaningless in terms of the Irish economy.

A case of "we need some statistics...these are statistics". Tempting, but highly misleading.

cordially,
Scofflaw