Quote Originally Posted by Fuchs View Post
They' have a between the devil and the deep blue sea. No answer is going to be nice.
Agreed. Risk is increasing for all of us in this interconnected world (..."the probability that an investment's actual return will be different than expected.")

In my previous post I posed some questions regarding how a Greek exit from the Euro and how that will impact the average Greek who uses banks to pay bills and save a bit of money. Retail banking is not the only sector that is impacted however. (Greece seems to have 20 main banks at the time of this post by the way - Citi and HSBC stand out).

The impacts upon Contract Law are interesting to think about.

Commercial Banking, Investment Banking, Central Banking (ECB and Bundesbank), and the IMF are also involved as bank runs are not limited to just the retail sector. We can see associated risk expressed as increased interest rates for sovereign debt, reduced interbank lending, and increased lending by central banks.



“The market is pricing in an Italy event and assuming that Italy fails,” said Patrick Lemmens, a senior money manager who helps oversee about $13 billion, including Intesa Sanpaolo shares, at Robeco Groep in Rotterdam.

Household deposits in Italy still are expanding “at a moderate pace,” according to the Bank of Italy. That’s a contrast to withdrawals seen in Greece, Ireland and Portugal.

Italy’s lenders started increasing their reliance on the ECB in July, when end-of-month borrowings from the central bank minus the amount deposited reached 58.8 billion euros, according to John Raymond, an analyst at CreditSights Inc. in London. Before that, net borrowings from the ECB ranged from 9 billion euros to 30 billion euros, he said.

The Economist Intelligence Unit has a timely, and interesting, read to consider: After Eurogeddon? Frequently Asked Questions About the Breakup of the Euro Zone.

There are too many unknowns to make confident predictions about the trajectory of the crisis or the extent and speed of any break-up, should efforts to save the single currency fail. The following FAQ represents an exploration of alternative scenarios that diverge from our central forecast. We attach a 60% probability to this central “muddle through” scenario, not least because the catastrophic consequences of a break-up provide a strong incentive for policymakers to do whatever is necessary to save the euro. In contrast, we think there is a 35% chance of a break-up of the euro zone, in which the most likely scenario would be the exit from monetary union of the smaller so-called “periphery” economies, as well as both Italy and Spain. We assign a 5% probability to Greece leaving the euro zone on its own, without triggering other departures.