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To: Beachside Bill who wrote (246989)	5/6/2010 4:59:48 PM
From: MulhollandDrive	Read Replies (2) \| Respond to of 306849

well of course the 'greece situation' hasn't changed...it's been festering for months...strike that...years.... i suppose other than hundreds of thousands of greeks rioting in the streets and the bond trading desks in europe stop lending it's the same ole soup nationalpost.com European bank risk spikes to record high Jane Merriman and Edward Taylor, Reuters Published: Thursday, May 06, 2010 The rise came as BNP Paribas chief executive Baudouin Prot said it had 5 billion euros (US$6.7-billion) of exposure to Greek sovereign debt, the highest shown by France's top banks. Reuters The rise came as BNP Paribas chief executive Baudouin Prot said it had 5 billion euros (US$6.7-billion) of exposure to Greek sovereign debt, the highest shown by France's top banks. LONDON/FRANKFURT -- A key risk indicator for Europe's banks hit a record high on Thursday as fears mounted over their exposure to Greece and amid signs that Athens' woes could spread to hurt other economies in the euro zone. The rise came as BNP Paribas said it had 5 billion euros (US$6.7-billion) of exposure to Greek sovereign debt, the highest shown by France's top banks. A record 110 billion euro bailout for Greece has failed to reassure financial markets and intensified fears that troubles will spread to Portugal and Spain, hurting bank stocks and sending them to a three-month low on Thursday. A risk indicator comparing Europe's banks with other companies widened to more than five times the level reached after the collapse of U.S. investment bank Lehman Brothers in September 2008, showing that banks are in the frontline if Greece's debt crisis intensifies. "It's a reaction to Greece and also Portugal because European banks hold such a large portion of their debt," said Michael Hampden-Turner, strategist at Citi. "People are only just beginning to join the dots on the implications if Greece defaults." The European bank index was down 4.8% at 192.5 points, its lowest since Feb. 8. The fears of contagion have spurred investors to hedge exposure to their losses from Greek debt, pushing the cost of insurance on bank credit sharply higher. Five-year senior credit default swaps (CDS) on BNP Paribas were about 13 basis points wider at around 138 basis points, according to Markit data. BNP, France's biggest listed bank, on Thursday beat expectations with strong first quarter profits, but the shine was taken off as it revealed a 5 billion euro (US$6.7-billion) exposure to Greek sovereign debt. The bank said it would not lend a helping hand to Greece by participating in a rescue package, reflecting a mixed mood among lenders to calls to join a German-led private sector coalition to help. "The commitments we have made (on Greece) we will keep ... We will do all this but nothing more," chief executive Baudouin Prot told a news conference. Italy's Intesa Sanpaolo, however, said it is open to discussing direct bank aid to Greece, Chief Executive Corrado Passera said, according to ANSA news agency. BNP's disclosure came a day after smaller rival Societe Generale said its exposure to Greek sovereign debt was 3 billion euros. BNP said it also had a 3 billion euro exposure to corporates in Greece, but said that was mainly with international firms and with risks that had "minimal correlation" to the economy. Germany's Commerzbank put its sovereign and bank risk in Portugal, Ireland, Italy, Greece and Spain at 26.5 billion euros, as investors fretted about a wider problem. "The banking systems of Portugal, Spain, but also Ireland, the UK and Italy are increasingly moving into the focus of the markets," credit rating agency Moody's Investors Service said in a report highlighting the contagion risk for banks. The agency said the potential for contagion could become a common threat to their banking systems. Widening bank CDS spreads have helped drive the Markit iTraxx Senior Financials credit default swap index to a level that is about 56.5 basis points wider than the broader iTraxx Europe index, according to Markit. This is a record wide spread, and compares with a spread of about 10 basis points just after Lehman Brothers filed for bankruptcy in September 2008. In normal times, there is a big spread differential in favour of the financial index. "This is not a normal situation. The banks are loaded with Greek risk, and this contagion effect is much stronger on the banking side than on the non-financial corporate side," said Jochen Felsenheimer, a fund manager at Assenagon Asset Management. Banks and insurers bought government debt in the credit crisis and its aftermath, which is now making them vulnerable to widening sovereign credit spreads. Investors, including insurers and banks, also increased exposure to banks in the bond and CDS markets to take advantage of rapidly narrowing spreads in the recovery. They are now hedging those positions by selling financial bonds or buying protection in the CDS market, pushing spreads of financial credits wider, Mr. Felsenheimer said. © Thomson Reuters 2010 Close

To: Beachside Bill who wrote (246989)	5/6/2010 5:24:53 PM
From: Broken_Clock	Respond to of 306849

"There is simply a growing recognition that Greece has got to default, said Rochdale banking analyst Dick Bove. "The riots in the streets showed the decision to repay the debt was not going to be made by the people in Germany, France and Switzerland, it's going to be made by people in Greece and they're not going to repay it," he said. "Anyone seeing the riots is going to recognize that this government is going to be thrown out and anything replacing this government is going to be far more leftist leaning and they're going to repudiate." cnbc.com