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If Greece Default Would Wreak Havoc On European Banks Then Ceo’S Should Be Fired

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http://www.zerohedge.com/article/guest-post-if-greece-default-would-wreak-havoc-european-banks-then-ceo%E2%80%99s-should-be-fired

If Greece Default Would Wreak Havoc On European Banks Then CEO’s Should Be Fired

Every day there is at least one headline about how catastrophic a Greek default would be. These headlines aren’t coming from the doom and gloom crowd, they are coming from senior government officials throughout Europe. There is great concern that a Greek default would hurt European banks. The potential domino effect to other countries scares these senior officials. If these fears are valid, then some senior bankers should be fired immediately because they have wasted the opportunity to reduce their exposures with reasonable losses.

Banks have had ample opportunity to cut their exposure to Greece. The original bailout and the announcement of EFSF gave these banks an incredible chance to get out of their Greek debt with manageable losses.

Hellenic Republic 6.1% of Aug 2015 bond price history with bank CEO thought process.

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..........

If banks didn’t massively reduce exposure when they had these windows of opportunity, and the EU is busy negotiating to save these same banks, someone needs to be fired. It is mind boggling that banks were either so afraid of taking a reasonable loss or so greedy that they thought they could do better that they kept these exposures. It had to have been clear to everyone at the banks how bad it could get, the only prudent, not even smart, just prudent, action was to cut exposures. Even if you missed the May rally which was the best opportunity to get out, how could you sit through the summer fear and not sell heavily into the October rally? Any explanation involves either stupidity, negligence, or complete faith in the government to bail you out. Sadly it is likely the latter, and that bank CEO’s were so comfortable that the governments would take care of them that they did not feel the need to cut dramatically. Or maybe the banks did cut their exposure and it is the EU and ECB who is lying to us, and the renegotiating with Greece to save themselves and not the banks.

More at the link.

Still who needs to sell when you can keep tapping up the good old taxpayer for some cash to cover your losses?

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If I had any money left in a European bank (including UK ones of course), I would be getting it out now for safety. When this blows up, I expect the banks involved (most of them?) will fall over yet again. I think of it this way...

Whole countries are going to "reprofile" their national debt (i.e. default). Do we really expect the (mostly) private banking system to have reserves assigned to bailout whole countries?

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If I had any money left in a European bank (including UK ones of course), I would be getting it out now for safety. When this blows up, I expect the banks involved (most of them?) will fall over yet again. I think of it this way...

Whole countries are going to "reprofile" their national debt (i.e. default). Do we really expect the (mostly) private banking system to have reserves assigned to bailout whole countries?

I agree. A Greek default would be catastrophic to the European banking industry, especially if ireland and Portugal follow in close succession. This is now a full-blown European crisis. The EU has two choices: default and disintegration or full political and fiscal integration. I can't see any other way.

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  • 312 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%



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