There’s quite a wealth of information in this post by Edward Harrison. The only thing I don’t like about it is the beginning. Why start a discussion by scaling up the problem? Using GDP at purchasing power parity to scale a problem for comparison to the US would be worthwhile if the point was to discuss the domestic impacts of the bank failure. Imagine a bank in the US failing with assets of $2.5 trillion. But, the purpose of the discussion is the international consequences. Contagion effects are better framed in absolute dollar amounts. Even better would be to try to assess the net external exposure, again in absolute dollar amounts. After all, if a tiny island with a GDP of a million dollars has a million dollar bank fail, we wouldn’t expect international consequences equal to a 15 trillion dollar bank failing in the US.

Aside from that (minor) gripe, this is an enjoyable read.