Significant Off-Sheet Holdings Spark Concerns of Echoes from the 2008 Financial Crisis

US Banks Conceal $7.4 Trillion Off-Sheet Holdings, Recalling 2008 Financial Meltdown

Financial experts and government agencies agree that the 2008 financial collapse highlighted hidden leverage in off-balance sheet entities at central Wall Street banks as a critical driver of the crisis.

• Large banks and thrifts maintained leverage ratios between 16:1 and 22:1 from 2000 to 2007.
• Some banks, like JPMorgan and Wells Fargo, were consistently high in leverage, while others, such as Bank of America and Citigroup, increased their leverage over time.
• Citigroup, in particular, held substantial off-balance sheet assets, contributing to a leverage ratio that could have reached 48:1 in 2007 if all assets were included.

Instead, most of these banks held their off-sheet balance unchanged, with the most notable example of Citigroup, which instead failed and received the largest bailout in the banking history by the US government, set at most of $306 billion losses.

The current state of banking, characterized by off-balance sheet liabilities reaching trillions of dollars, raises concerns about transparency and financial stability, with patterns emerging yet again.