"ECB Will be Insolvent and Costs May Exceed 1 Trillion Euros" Says IIF Director;
If the ECB Prints, Would Germany Exit the Euro?
According to IIF director Charles Dallara in a Bloomberg interview, "ECB will be insolvent if Greece were to exit the euro. Europe would have to first and foremost recapitalize its central bank."
Excuse me for asking but how would they attempt to do that? Print Euros?
Please consider Dallara Says Greek Euro Exit May Exceed 1 Trillion Euros
The cost of Greece exiting the euro would be unmanageable and probably exceed the 1 trillion euros ($1.25 trillion) previously estimated by the Institute of International Finance, the group’s managing director said.
The Washington-based IIF’s projection from earlier this year is “a bit dated now” and “probably on the low side,” Charles Dallara said in an interview in Rome today. “Those who think that Europe, and more broadly the global economy, are really prepared for a Greek exit should think again.”
The European Central Bank’s exposure to Greek liabilities is more than twice as big as the ECB’s capital, said Dallara, who represented banks in their negotiations with the Greek government on its debt restructuring. As a result, he predicted the bank would be unable to provide liquidity and stabilize the euro-area financial sector.
“The ECB will be insolvent” if Greece were to exit the euro, Dallara said. “Europe would have to first and foremost recapitalize its central bank.”
In February, the IIF estimated that Greece’s liabilities, in the event of a euro exit, could be crippling. “It is hard to see how they would not exceed 1 trillion euros,” the group said in an internal Feb. 18 report that hasn’t been made public.
It’s not clear whether Spain will need a bailout as it seeks to help its banks weather the euro crisis, he said.
“The only way to help markets see past that obscurity is to remove the cloud of uncertainties of national fiscal position and move toward unification,” Dallara said.
weiter bei globaleconomicanalysis - Friday, May 25, 2012 4:56 PM
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Die Kollegen von Deutsche Wirtschafts Nachrichten haben diese Meldung übernommen und berichten:
Internationaler Bankenverband: „Griechenland-Austritt löst Insolvenz der EZB aus“
Der internationale Bankenverband IIF glaubt, dass ein griechischer Austritt aus dem Euro zur sofortigen Insolvenz der EZB wäre führen würde. Mit dem bescheidenen Beitrag von 10 weiteren Milliarden durch die deutschen Steuerzahler und einer geringfügigen Verschiebung des Sparprogramms um zwei Jahre könnte man das Problem Griechenland nach Ansicht von Charles Dallara leicht lösen.
Deutsche Wirtschafts Nachrichten | Veröffentlicht: 27.05.12, 00:29 | Aktualisiert: 27.05.12, 02:09 | 8 Kommentare