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I think you should read about LTM and what it wrought. Look what Lehman's collapse did. When everyone is over leveraged then it doesn't take much to get a cri
by yequalsx 16y ago
I think you should read about LTM and what it wrought. Look what Lehman's collapse did. When everyone is over leveraged then it doesn't take much to get a crisis rolling. If Ireland and Greece aren't propped up then Deutche Bank will suffer. It was German and French banks that lent to Greece and Ireland. Do you really think DB would survive if their Irish and Greek bond holdings become worthless?
- ig1 16y agoThe largest amount of Irish debt is actually held by the UK who aren't a member of the euro...
- yequalsx 16y agoYet, it is still true that DB holds a lot of Greek and Irish debt. If Ireland and Greece fail to pay this back then there will be severe problems for Germany even though they are small countries.
- lispm 16y agoSo what? The task is to keep the banks alive. Much of the rest of Ireland is still there. There are still people, buildings, companies, services, machines, ...
- jordanb 16y agoThe problem is that, early in the crisis, the Irish government took the bank debts onto its own books. So it's now in a situation where defaulting on the loans is no longer a matter of a large private institution failing (which is bad enough) but a sovereign government (and Eurozone member) repudiating its obligations.