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Uncle Sam is on the hook as well! |
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27 June 2011 |
Justin Urquhart Stewart is one of the most recognisable and trusted market commentators on television, radio, and in the press. Originally trained as a lawyer, he has observed the retail market industry for 20 years whilst at Barclays Stockbrokers and developed a unique understanding of the market's roles and benefits for the private investor.
Justin Urquhart Stewart is one of the most recognisable and trusted market commentators on television, radio, and in the press. Originally trained as a lawyer, he has observed the retail market industry for 20 years whilst at Barclays Stockbrokers and developed a unique understanding of the market's roles and benefits for the private investor. Justin provides financial advice to clients of Kester Cunningham John Financial Planning LLP.
Writing about the Greek crisis is about as useful as rereading yesterday's fish and chip paper. Events will overtake anything written today, and the events seem to belong in more of a soap opera rather than a serious economic and political crisis. However, it may be worth recalling, if only for ease of reference, just how much the UK banks are exposed to Greece and the other weakened peripheral nations. The grand total (as quoted from Barclays Capital as of Q4 2010) is just over $380bn, with the breakdown being exposure to Greece $19bn, to Portugal $29bn and to Spain $138bn. However, the largest exposure for the UK is of course to Ireland at $194bn. This is in fact slightly more than the French, who have a total exposure of $329bn with their largest risk being to Spain at $176bn. The largest European exposure, not unsurprisingly though, is with Germany who have a total of $473bn with large exposures to both Spain and Ireland.
However, what I found most interesting was the other large debt holder who is well and truly on the hook and probably needs to be more creative over the situation, not just be throwing brickbats at those 'irresponsible' Europeans. That is, of course, the USA with a US bank exposure of $372bn, making it number three in the title contenders for the most exposed.
So we have to sit back and watch this 'Greek' tragedy play out. Whilst politicians still stare at the symptoms (trying to avoid an outright default) perhaps others will be looking at the root causes and start to address those issues as I have discussed before. Perhaps though we should take more comfort from the numbers overall for the whole Eurozone, because if you combined them into a single financial super state then there would be no financial crisis of either debt or deficit. So, time for European politicians to take a European view and not just a national one maybe. Crisis |
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