"Brexit Might Have Cost Banks $165 Billion"

From BloombergView:

For those wondering about the repercussions of Britain's vote to leave the European Union, here's a data point: By one measure, the largest U.S. and European banks are about $165 billion worse off.

A model set up by economists at New York University regularly performs a sort of simplified stress test on the world's largest financial institutions. It does so by asking the stock market what it thinks about the value and riskiness of the banks' assets, then using that information to estimate what would happen to the banks in a severe crisis -- and how much added equity capital they would need to avoid distress.

Even before Brexit, the model suggested that banks were much more fragile than official stress tests indicated: As of May 31, it estimated that the largest banks in the U.S., U.K., Germany, France and Italy (those with more than $500 billion in assets) would have a combined capital shortfall of $998 billion.

After the Brexit vote, the shortfall rose significantly. As of June 28, it stood at $1.163 trillion, an increase of $165 billion. Here's a breakdown by country, in billions of dollars:

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