by Philipp Halstrick and Stella Dawson
Reuters
September 26, 2011
Bankers are bracing for a Greek default, and their best hope is that Europe can erect firewalls around the banking system strong enough and soon enough to prevent it from spreading to other euro-zone countries.
So gloomy were bankers from major financial institutions, attending a conference on the sidelines of the International Monetary Fund/World Bank sessions, that they compared the risks of financial market contagion to the collapse of Lehman Brothers.
"The direct financial exposure in the European banking system is extremely manageable. What's the indirect impact? You're going to have one massive demand shock," said Vikram Pandit, Citigroup's chief executive officer.
"The fact is we should all expect some sort of a GDP impact if you have a demand shock that's going to be that significant and that's going to have an impact on business."
The biggest fear is that Greece defaulting on its 340 billion euros in government debt would trigger widespread selling of euro-zone debt causing a much broader financial crisis.
More
No comments:
Post a Comment