Jump to content
House Price Crash Forum
Deckard

Wondering Why Germany Will Do Anything To Prevent A Greek Default?

Recommended Posts

Fitch says Commerzbank AG ( A+/F1+) is the commercial bank most exposed to overall Greek rise in absolute (Euro) terms

Just a headline for now, let's wait for more details.

In the meantime, here is the big picture.

Greek domestic banks are by far the biggest holders of the country's bonds with some 50 billion euros of exposure, according to a handful of estimates.

But another 50 billion is held at banks outside the country, with German banks alone exposed to around 19 billion of the paper, while French banks hold another 15 billion.

Can Merkel convince the German taxpayer to fork out to save German banks?

The future of the Euro pretty much hinges on this.

Share this post


Link to post
Share on other sites

Fitch says Commerzbank AG ( A+/F1+) is the commercial bank most exposed to overall Greek rise in absolute (Euro) terms

Just a headline for now, let's wait for more details.

In the meantime, here is the big picture.

Can Merkel convince the German taxpayer to fork out to save German banks?

The future of the Euro pretty much hinges on this.

I think German exposure is around $45bn

piigs.jpg

post-9355-0-91216000-1306336844_thumb.jpg

Share this post


Link to post
Share on other sites

lets not also note that every bank in the World will be exposed to CDS based on Greek, Portugues and any other Sovereign debt.

They buy insurance to cover the default, buy find if there is ever a need to pay out, they cant collect.

What use IS the CDS instrument, and derivatives created therefrom?

Share this post


Link to post
Share on other sites

It's pretty clear that until the banks are given a haircut they will keep buying dross and taking the mega interest rates secure in the knowledge that the taxpayer will bail them out if there's a default. (In fact, why is there even a CDS market?)

Share this post


Link to post
Share on other sites
lets not also note that every bank in the World will be exposed to CDS based on Greek, Portugues and any other Sovereign debt.

They buy insurance to cover the default, buy find if there is ever a need to pay out, they cant collect.

What use IS the CDS instrument, and derivatives created therefrom?

I suppose it's the perfect business in a way- set yourself up as an insurance business, with zero assets backing your policies- take the premiums and when the claims come in shout 'Systemic risk' and the nice men from the government will pay off your clients with money they will extract from the sheeple.

There is only one rule- whatever you do do not call yourself an insurance company- there are all sorts of petty rules that apply to insurance companies. Other than that anything goes. :D

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 285 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.