In the US it's mostly of bond portfolios

Subsidiary of the giant of the Blackrock asset management, Blackrock Solutions has played a central role during the financial crisis. Employing 500 people in the world, she has worked for the US Fed, by helping to analyze and manage the toxic assets of Bear Stearns, Fannie Mae, Freddie Mac or AIG. In Europe, she would have advised the British and German Governments on the possible creation of "bad bank", as well as the Swiss UBS. In France, Blackrock Solutions examined the portfolio stationed Natixis and Credit Foncier. End of June, barely ten years after its opening to the external customer, structure claims analysis and audit of nearly 7,000 billion (4.671 billion euros) of assets of all kinds, funding structured through bonds and credit derivatives. The tests, which can last between two weeks and two months, are to "stress" toxic assets according to two variables: the rate of GDP growth and the unemployment rate. An analysis of paramount while the IMF considers that there are still 1,500 billion of debts "toxic" not provisioned in the banks.

Why European banks keep they cover their toxic asset portfolios, while US banks seem to output case

First, the composition of the portfolios so-called "toxic" in Europe and the United States is very different. In Europe, these portfolios primarily consist of loans, often linked to the real risks but also to corporate risk where some of the excesses have been recorded (in the particular LBO). In the US, it's mostly of bond portfolios. Accounting treatments are not the same: losses on bond portfolios are generally subject to mark-to-market plan, and therefore immediately found, then the provisions for debts can spread over several years.

In addition, the securitized assets - which are under the mark-to-market plan - are much more prevalent in the United States (70) and Europe (30). As the assets not securitized can be more easily restructured that securitized assets, this delay in some cases the registration of ships. For example, the repayment period may be extended to improve the ability of the borrower to repay.

Finally, data on markets, including real estate (residential and commercial), from which more than 90 of the securitized products, are more difficult to obtain in Europe and the United States, because each country in its own statistics, and there is no standard to develop. Hence a problem for data for European banks. This means that in Europe everything is a little less clear and that he must regularly make adjustments in the amount provisioned.

How long the European banks will continue to cover their assets "toxic"

This could last a few more years. All in fact depends on the profile of each bank, i.e. If the assets it holds are more or less exposed areas or countries at risk, such as the United States, the countries of Central Europe or Eastern, or commercial real estate Spanish and Irish. It also depends on their policy of provisioning as well as the number and the amount of restructured debts. But I think that even if it lasts many years there will be a slowdown in staffing provisions when banks have identify more precisely the losses that they need to crystallize.

Can you estimate the maximum risk

Yes, but the exercise is difficult and subject to lot of assumptions. It is more an art than a science. For example, in commercial real estate, loan maturity is generally five years, repayable in almost all expire. Gold 2007 was the year where the number of loans has been the most important. On the degradation of conditions and the withdrawal of some banks in the real estate sector, it is in 2012 that payments of the mortgages will be difficult and that it will reach a peak in the defects of payments. The crisis in this sector is therefore delayed, but the banks are aware and have all begun to cover this risk and to restructure the loans.

What risk to French banks

They are rather well positioned and for several reasons. First, there was not was in France a bubble on the commercial real estate as there was in Ireland or Spain y. And who says absence of bubble said lack of crisis of the same magnitude. Then, the French banks had a management system risks rather orderly. They did not, for example, invested massively in the United States as some banks German or English. More generally, the French have done better that other banks in the world.

US banks are able to sell some of their "toxic" assets and save times of provisions. The securitization market opens again

In Europe, there has been some primary market of residential real estate (RMBS) transactions. But they are still small, structured to reassure investors or very short. Difficult, therefore, to speak of a real opening. Market (CLO) credits collateralized debt obligations, it is again a few operations, but then again, this is difficult. Conversely, the commercial real estate (CMBS) market remains completely closed, because, no doubt, the uncertainty on the future performance of the underlying. Finally, on the market, tickets are a little larger, but transactions remain essentially confined to the triple A rated senior titles.