EU banking stress test:67% of Greek debt held by Greek banks The data from the sample of 90 banks (Dec. 2010) shows the aggregate exposure-at-default (EAD) Greek sovereign debt outstanding at EUR98.2 bn. Sixty-seven percent of Greek sovereign debt (and 69% of the much smaller Greek interbank position) is in fact held by domestic banks (about 20% refers to loans which are mostly guaranteed by sovereign). The aggregate EAD exposure is EUR52.7 bn for Ireland (61% held domestically) and EUR43.2 bn (63% held domestically) for Portugal. Importantly, EAD exposures are different from similar exposures reported on a gross basis in the disclosure templates. The chart below shows the geographical breakdown of Greek sovereign debt (EAD) held by EU banks participating in the stress testing exercise. In general the EBA is not aware that these figures have changed substantially since end 2010 and for a few banks their holdings of such debt has in fact decreased.
The real problem is Germany and France. Together they are about 3.5 trillion euro in debt. Focussing on Greek is basically attracting the attention away from the main problem.
Let me please disagree in a big way. France is not a problem as much as Germany. Germans have reached overcapacity, they cannot create any more wealth, the south cannot buy more of their fancy cars and they need to issue loans by forcing other countries to default. Maybe at this point Germany appears not to have a problem but should Europe go into a deeper recession the German debt will become an issue. At the same time, the south is food production independent and has a better climate with less dependence on energy and oil. Germans are in a big trouble. A giant with glass feet. They cannot print their debt away and they are stuck with the gamble they played with creating EU. Their only hope is that more countries default so they can lend them money at high interest. They have resorted to usury at this point. Stupid Greek bite the bate along with Portugal and Irish. Spain does not buy it. Recall that the Germans were insisting Irland and Portugal get help from the EU. Why? Newly printed money in the form of loans. All that means the EU will be breaking down soon.
Sure, dude... We can have a meaningful discussion about this, as it's an interesting topic. For the record, I disagree with your disagreement . You're certainly 100% right to bring up the various issues that make the German economy vulnerable. However, I think that the good things they have going for them are quite powerful. Moreover, in comparison to France, they actually have a lot less exposure to periphery (I think I did the calculation and it's smth like 15% of GDP for France and 7% or arnd that for Germany). We'll have to wait and see, I think.
Exposure-at-default (EAD) is one analysis ( probably incorrect ), does anyone have to hand total exposure by country? How does the ECB accepting Greek debt as collateral against new loans to Greece affect total liablilties and does anyone have the data on that? On the subject of Germany vs France, whilst France is good at conjuring up numbers to keep their credibility, think I would stick with Germany's historic positive logical P&L as a better positive basis for their future.
You can find the numbers here: http://www.bis.org/statistics/consstats.htm Not sure what you mean by Greek debt as collateral against new loans to Greece. That's not really what's happening, unless I misunderstand your meaning.
GS restructured GREEK debt back in 05 or there about. When GS went into restructured their debt, they did it at crazy pay back terms. GREECE is a product of their own stupid Financial Agreements with not only GS but also with their Socialist Union Structure. GREECE is an example of failed Socialism and it's the same Socialism by which the idiot Liberals are pushing this country. Plenty of Countries have default on their debt....some make it back, some do not. GREECE default is not only going to happen but it is one of many, including the US that will Default. Fiat Currency is being destroyed world wide. Once the Euro plunges, EU breaks Up, watch out for the All Mighty Dollar. Bottom line, Fiat Currency will no longer work with out "Gold Backing". Mexico, China, Brazil and other countries have bought Physical metals to prepare for this transition. The US houses plenty of GOLD all though we have no idea how much. Nevertheless, countries who can not back their currency in Physicals will end up imploding after Hyper Inflation Sets in. I do not believe the US is one of these to implode. However, the Middle Class will be "Wiped out" by 2014/15. There is no saving the Middle Class as a whole.
Martinghoul, Thank you for the link. I understood the ECB has/is making loans to Greece/Greek banks using defaulted bonds as collateral, though it is reconsidering this option now.