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frenchX
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What would be the effects of Greece defaulting ?

June 15th, 2011, 8:59 am

Simple question but hard answer.I would like to hear your opinions
 
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Traden4Alpha
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What would be the effects of Greece defaulting ?

June 15th, 2011, 9:18 am

It depends on who owns the defaulted debt and whether they can absorb the losses.
 
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frenchX
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What would be the effects of Greece defaulting ?

June 15th, 2011, 9:23 am

It's not that simple because I fear of a domino effect.For example Société Générale, BNP Paribas and Crédit Agricole own a lot of Greek Debt but US IBs owns a lot of those french bank assets .It's the snowball effect. Do you know how to find the exposure of banks to the Greek debt ? French banks seem to have some exposure but I'm guessing that Swiss, German or UK ones are not really different.
Last edited by frenchX on June 14th, 2011, 10:00 pm, edited 1 time in total.
 
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Owais
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What would be the effects of Greece defaulting ?

June 15th, 2011, 11:15 am

QuoteOriginally posted by: frenchXIt's not that simple because I fear of a domino effect.For example Société Générale, BNP Paribas and Crédit Agricole own a lot of Greek Debt but US IBs owns a lot of those french bank assets .It's the snowball effect. Do you know how to find the exposure of banks to the Greek debt ? French banks seem to have some exposure but I'm guessing that Swiss, German or UK ones are not really different.Which French Bank has maximum Greek exposure?
 
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frenchX
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What would be the effects of Greece defaulting ?

June 15th, 2011, 11:25 am

Société Générale I would say. I have heard that they have 10% of their Tier 1 capital exposed to Greek debt (private or public).
 
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katastrofa
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What would be the effects of Greece defaulting ?

June 15th, 2011, 11:50 am

QuoteOriginally posted by: frenchXSociété Générale I would say. I have heard that they have 10% of their Tier 1 capital exposed to Greek debt (private or public).That's mighty stupid of them. Shouldn't the free market punish stupidity and reckless risk taking?
 
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frenchX
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What would be the effects of Greece defaulting ?

June 15th, 2011, 2:51 pm

It's just a bet ; bailout or default. Swiss banks are also very exposed to Greek debt and if you consider the PIGS debt, the 3 biggest exposed are UK, France, Germany in this order. That's why Greece can't default.
 
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katastrofa
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What would be the effects of Greece defaulting ?

June 15th, 2011, 3:18 pm

A common thing between the PIGS crisis and the subprime crisis is that there is absolutely no mechanism to punish private banks for lending money to borrowers without caring if they will be able to pay back the loans. Without such a mechanism, we'll have one bailout after next.
 
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frenchX
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What would be the effects of Greece defaulting ?

June 15th, 2011, 5:49 pm

I totally agree but it's supposed to be the job of the rating agencies no ?And I fear that we are stucked in a gobal Ponzi scheme. No one can payback its promissed debt, only by generating longer term ones.
Last edited by frenchX on June 14th, 2011, 10:00 pm, edited 1 time in total.
 
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tags
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What would be the effects of Greece defaulting ?

June 16th, 2011, 8:10 pm

QuoteOriginally posted by: OwaisQuoteOriginally posted by: frenchXIt's not that simple because I fear of a domino effect.For example Société Générale, BNP Paribas and Crédit Agricole own a lot of Greek Debt but US IBs owns a lot of those french bank assets .It's the snowball effect. Do you know how to find the exposure of banks to the Greek debt ? French banks seem to have some exposure but I'm guessing that Swiss, German or UK ones are not really different.Which French Bank has maximum Greek exposure?this blog entry has interesting figures and comments regarding the exposure of french banks to the greek debtand this column shows the exposure of major UE-27 countries (jump to the bottom of the webpage).
Last edited by tags on June 15th, 2011, 10:00 pm, edited 1 time in total.
 
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frenchX
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What would be the effects of Greece defaulting ?

June 16th, 2011, 8:33 pm

thanks a lot Edouard ! The famous graph from the article you quoted : Keep in mind that the sources date from September 2009 Here another article on the subject :Greek exposure by TelegraphCountry Total lending exposure to Greece (millions) Total Government debt exposure to Greece (millions) Total of 24 countries 145,783 54,196 European banks 136,317 52,258 Non-European banks 9,466 1,938 France 56,740 14,960 Germany 33,974 22,651 Italy 4,085 2,345 Japan 1,631 432 Spain 974 540 UK 14,060 3,408 US 7,318 1,505 Source: BIS Quarterly Review Should be a more recent stuff. Pretty bad news for us, french !
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VegaPlus
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What would be the effects of Greece defaulting ?

June 16th, 2011, 8:50 pm

It can give an first picture but I think after the first EU plan to help Greece, their exposures are much higher now. Now we understand why France and Germany are so worried about the situation
 
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katastrofa
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What would be the effects of Greece defaulting ?

June 17th, 2011, 5:20 am

First thing which should be done is forcing the banks to disclose their exposure to Greece. It would clear up the atmosphere, and no banks would be made any worse off if they all had to do it together.@VegaPlus"It can give an first picture but I think after the first EU plan to help Greece, their exposures are much higher now."Why?
 
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EndOfTheWorld
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What would be the effects of Greece defaulting ?

June 17th, 2011, 5:23 am

This link might be interesting:Reminder Banks most exp
 
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VegaPlus
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What would be the effects of Greece defaulting ?

June 17th, 2011, 7:51 am

QuoteOriginally posted by: katastrofaFirst thing which should be done is forcing the banks to disclose their exposure to Greece. It would clear up the atmosphere, and no banks would be made any worse off if they all had to do it together.@VegaPlus"It can give an first picture but I think after the first EU plan to help Greece, their exposures are much higher now."Why?I think after the first plan, they bought some Greek debts which might have increase their exposure. Not sure.