Response to the following problem:
The ratio of total liabilities to total assets for the 12 largest bank holding companies for a recent year are shown in the table below. The average ratio of total liabilities to total assets for the group is 91.1%. This means that the average debt held by these banks is over 91% of their total assets, which is much more than in any other industry
Bank Holding Company Ratio of Total Liabilities to Total Assets
Citigroup Inc. 0.925
J.P. Morgan Chase 0.908
Bank of America Corporation 0.910
Wachovia Corporation 0.898
Wells Fargo & Company 0.911
Taunus Corporation 0.987
U.S. Bancorp 0.900
Suntrust Banks, Inc. 0.896
National City Corporation 0.906
Citizens Financial Group, Inc. 0.848
ABN AMRO North America Holding Company 0.939
Countrywide Financial Corporation 0.906
Average 0.911
Why are these ratios so large?