Expect to hear a lot more about asset encumbrance, say SocGen Asset encumbrance ratios are becoming a fashionable metric when it comes to assessing the health of banks. On that note, Société Générale's cross-asset research group provides a nice little break-down on Monday. While SocGen don't believe that asset encumbrance is a major problem for any bank yet, they do recognise that the issue is becoming important on account of banks" recourse to secured funding, and one likely to be picked up on by ratings agencies soon. (A trend they say was identified in 2011. Though we'll cheekily just stick this little link in over here.) In any case here's the breakdown chart they provide (curiously missing SocGen as far as we can tell): They add: Asset encumbrance has increased substantially over the last few years, as we explained in our note published in December 2011: Brave new (secured) world of wholesale funding. Since the end of 2011, this increase has been led less by covered bond issuance than by central bank refinancing. In fact, we believe the two ECB LTROs have to some extent "crowded out" the covered bond market as it partially mobilised some assets that would otherwise have been available to the cover pools. Related links: The secured lending boom (through gold-tinted glasses) - FT Alphaville Go directly to the ECB, do not pass Go, do not collect €200 - FT Alphaville On SocGen's pawnshop defence - FT Alphaville