Analysts: Banks vulnerable to Greek exit

23 May 2012

European banks are facing an uncertain future if Greece has to exit the eurozone in the coming weeks, experts believe.

Doubt continues to cloud the region at present, as it is unclear as to whether or not the struggling Mediterranean country will remain as part of the economic bloc moving forward as it still has no government following the collapse of the previous regime.

Meanwhile, other member states such as Spain - which is back in recession and battling record-high unemployment - and Italy are also facing long and arduous journeys back to economic health.

With this in mind, analysts feel the continent's banks are increasingly vulnerable due to the fact they hold some $1.19 trillion worth of debt in these nations.

For instance, Jacques-Pascal Porta of Ofi Gestion Privee in Paris, said a Greek exit would be a "Pandora's box".

"It's a disaster that would leave the door open to other disasters. The euro's credibility will be weakened and it would set a precedent," he added.

By Gary Cooper

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