Bloomberg
Half of German Bankers Expect Euro Default, Ernst & Young Says
By Jeff Black - Jan 11, 2011
Nearly half of German bankers expect at least one euro region nation to default on its debt, auditing firm Ernst & Young said, citing a survey.
Forty-seven percent of respondents forecast a default at least “over the medium term,” Ernst & Young said, citing a survey of managers at 120 German banks in December by Bielefeld- based Valid Research. Only a quarter said that such an event would hurt their institution. Fifty-three percent of bankers surveyed said governments will meet their obligations.
“The vast majority of the banks surveyed hold very few or no bonds from the shaky states,” said Claus-Peter Wagner, head of Ernst & Young’s German financial-services branch. “They therefore don’t have to worry about a default.”
Bonds have plunged across the euro region’s peripheral nations in the past year as contagion from the bloc’s fiscal crisis spread, sparking concerns about losses at Europe’s biggest banks. Greece and Ireland were forced to seek European Union-led bailouts last year and Portuguese bonds have dropped this year on concern that Portugal will be next.
To contact the reporter on this story: Jeff Black in Frankfurt jblack25@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.ne
t
Posts
