Are European banks broke?

According to Bloomberg, Michael Platt, the founder of the $30 billion hedge fund BlueCrest Capital Management LLP, said most of the banks in Europe are insolvent and the situation will worsen in 2012 as the region’s debt crisis accelerates.
“I do not take any exposure to banks at all if I can avoid it,” Platt, 43, said today in an interview on Bloomberg Television’s “Inside Track With Erik Schatzker.” If European lenders had to mark their books to markets every day in the same way hedge funds do, most would be proven “insolvent,” he said.

BlueCrest is pouring money into U.S. Treasuries and short- term German debt because of concerns about market volatility and counterparty risk, Platt said. BlueCrest Capital International, the fund he personally manages in Geneva, has risen about 5.6 percent in 2011, posting gains when hedge funds broadly are on pace to have their second-worst year ever.

The Bloomberg Europe Banks and Financial Services Index (BEBANKS) has slumped 35 percent this year on concern over lenders’ holdings of government debt. France’s BNP Paribas SA, Royal Bank of Scotland Group Plc and Deutsche Bank AG have been paring sovereign bonds and yields on Italian, Spanish and Portuguese debt have risen to euro-era highs…..

Find out more at http://www.bloomberg.com/news/2011-12-15/bluecrest-s-platt-says-most-european-banks-insolvent-debt-crisis-growing.html