Euro rises above 1.41:German bank exposure to Greece ‘manageable’: Fitch

Discussion in 'Wall St. News' started by ASusilovic, May 25, 2011.

  1. LONDON (MarketWatch) — German banks’ exposure to Greece is “manageable,” but contagion risks are high, Fitch Ratings said in a report released Wednesday.

    “The worst consequence of any Greek sovereign default for German and other European banks would be in a sharp increase in general capital market and creditor risk aversion at a time when many banks are still in rehabilitation mode,” said Michael Dawson-Kropf, senior director in Fitch’s EMEA financial institutions group.

    The ratings company said it “does not currently envisage” any rating action on German banks as a result of their direct exposure to Greece, but sees “high potential contagion risks” if there were any restructuring of Greek sovereign debt.

    The report provided relief to equity markets, with U.S. and European stock markets subsequently edging higher.