Yes I do have one – and always a nice vista in any direction.
So we have the Greece festering boil not popping – but both Portugal and Italy a tad Bank shy – more so due to the nationalization of a few Banks – through bad lending – and a larger than normal Non Performing Loans situation – then all of these Banks being unable to obtain private funding to recapitalize.
So do we have a problem?
No – nyet – nein.
The reason is simple – the risk is being borne by the taxpayers of both Portugal and Italy – the size of the troubled Banks themselves – are not necessarily in that tipping zone of posing a Sovereign risk.
The Banks that are in trouble – are not a ‘Lehman’ vintage wrecking ball – they are in fact not even a blimp on my radar.
So whilst taxpayers – subordinated Bondholders – are bearing the brunt of the burden – it is not a sovereign risk and the amount of the gross liability can be absorbed by each country.
Note please those Banks that are a risk – DeutscheBank – HSBC – CreditSuisse.