Posted on 11/26/2011 9:58:19 PM PST by DeaconBenjamin
For the growing chorus of observers who fear that a breakup of the euro zone might be at hand, Chancellor Angela Merkel of Germany has a pointed rebuke: Its never going to happen.
But some banks are no longer so sure, especially as the sovereign debt crisis threatened to ensnare Germany itself this week, when investors began to question the nations stature as Europes main pillar of stability.
On Friday, Standard & Poors downgraded Belgiums credit standing to AA from AA+, saying it might not be able to cut its towering debt load any time soon. Ratings agencies this week cautioned that France could lose its AAA rating if the crisis grew. On Thursday, agencies lowered the ratings of Portugal and Hungary to junk.
While European leaders still say there is no need to draw up a Plan B, some of the worlds biggest banks, and their supervisors, are doing just that.
We cannot be, and are not, complacent on this front, Andrew Bailey, a regulator at Britains Financial Services Authority, said this week. We must not ignore the prospect of a disorderly departure of some countries from the euro zone, he said.
Banks including Merrill Lynch, Barclays Capital and Nomura issued a cascade of reports this week examining the likelihood of a breakup of the euro zone. The euro zone financial crisis has entered a far more dangerous phase, analysts at Nomura wrote on Friday. Unless the European Central Bank steps in to help where politicians have failed, a euro breakup now appears probable rather than possible, the bank said.
(Excerpt) Read more at nytimes.com ...
Still here.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.