Bank of America says banks may have $100 billion in exposure to Glencore

Marketwatch reports:

Embattled commodities giant Glencore PLC could prove a $100 billion elephant in the room for some of the biggest U.S. banks as they report quarterly results and undergo tests of their financial health in the coming months.

The hefty sum comes from a Wednesday research note from Bank of America Merrill Lynch that assesses the exposure of banks to Glencore.

Debt from the mining-and-commodities trading firm could deliver a jolt to the financial sector, if the giant miner can’t keep up with payments on its bank loans.

The investment firm doesn’t go into specifics about the banks that could be exposed to Glencore, but says a number of U.S. and European financial institutions provide credit to the miner and other commodity-focused firms. Bank of America points out that financial regulators performing stress test on banks’ abilities to withstand market shocks could be on the lookout for exposures to Glencore and other troubled miners.

What the Federal Reserve creates can be taken away as a bubble bursts.