Why European Banks Look Precarious

"We've said for some time that European banks are (believe it or not) in even worse shape on average than their US peers, although the public at large is far more aware of the problems here by virtue of our financial system having hit the wall so spectacularly. While US firms waded into risky waters with reckless abandon, so too did their EU cohort. And while the American firms may have gotten in deeper, the Euro banks have much smaller equity bases relative to the size of their balance sheets, and thus vastly less tolerance for error."