P.I.G.S. Banks a problem? Hint – Not from my point of view.

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.

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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.

http://www.bis.org/publ/bcbs201.pdf

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