With more and more highly leveraged companies going bankrupt, the commercial banks and financial institutions are feeling the pinch.

Enron, the energy giant filed for bankruptcy recently. It was a huge energy company and a member of Fortune 500 club. Though this collapse has received wide attention all round, the plight of its creditors is unknown. Being one of the largest bankruptcies in the history of American business and given the leverage Enron carried, it is sure that the fate of banks and financial institutions, which have lent to Enron hangs in balance. Such a large bankruptcy has the potential to bring down its creditors along with it.

Who are Enron's creditors and what is their exposure? With $ 13 bn in direct liabilities, Enron's list of creditors reads like a who's who in the financial world. Leading Enron's list of creditors are Citigroup and JP Morgan. It is also said that Enron's creditors include its competitors like Duke Energy, Mirant, AEP, Calpine and Dynegy. It is said that Enron owes millions of dollars to these companies. Small companies like Calpine would end up in losses as a result of the exposure to Enron's debt. This bankruptcy was sparked off 10 weeks ago when a discrepancy in accounts prompted an investigation by US financial watchdogs and a collapse in the firm's share price not only affected the American financial world but had far reaching effects. Australia's four biggest banks have announced liabilities of $ 50 to $ 100 mn between them. French Bank Credit Lyonnais has admitted insecure exposure of $ 250 mn, while Netherland's ABN Amro was a part of a syndicate that loaned $ 3 bn to a project in India.

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