In the absence of ultra transparency and Lloyds disclosing its current asset, liability and off-balance sheet exposure details, no one knows.
The article tallies how much has been spent so far, but no one knows if this has addressed all the bad exposures hidden on and off the balance sheet.
The same goes for RBS or any other financial institution.
Royal Bank of Scotland has put the bill to clean itself up at £38bn.Is it now cleaned up?
So what about its fellow bailed-out bank, Lloyds?
A quick analysis of the results published by Lloyds for the same period – from the start of 2009 to the end of September 2011 – produces a figure of £55bn.
This £55bn includes £45bn of impairment charges (from loans which are not repaid on time): £24bn in 2009, £13bn in 2010 and £7.4bn in the nine months to 2011.
A £3.2bn provision for payment protection insurance, £3.6bn of integration costs and a £2.5bn fee for exiting the asset protection scheme push the bill to £55bn.The analysis on Lloyds suggests that the clean up is still continuing. But how much more until the end is reached?
Direct comparisons between the two banks are not straightforward. Lloyds inherited 80% of its impairment charges as a result of the rescue of HBOS during the 2009 banking crisis. RBS's losses were mostly homegrown with some inherited from the acquisition of ABN Amro at the height of the credit crunch in 2007.Actually, there is one fact that unites the banks. Neither provides ultra transparency and as a direct result, no one knows what losses are still hidden on and off their balance sheets.
The £38bn of RBS costs includes £28bn of impairment charges, the near-£1bn provision for mis-sold payment protection insurance, and £2.9bn of restructuring charges as well as credit writedowns caused by the 2007 credit crunch.
As a quick reminder, taxpayers put £45bn into RBS and almost £20bn into Lloyds....
RBS boss Stephen Hester talked on Wednesday about having the task of defusing "the biggest time bomb in history". An interesting question, perhaps, as to which bomb was bigger.
A question of course that ultra transparency answers.
As for defusing the biggest time bomb in history, with ultra transparency, there would have been no explosion to take place. Since the market could see and value both banks exposures, all the losses would already have been recognized and management's focus would be on providing service to the real economy.