UK Banks Abandon Eurozone Over Greek Default Fears!

• The market is sensing severe danger dead ahead and are reacting accordingly. Make sure you take precautions for this crisis. The PIIGS will default and bring down the entire Eurozone. It is a matter of when? The timeline is at most a year. It could also be any day now! When this crisis comes, it will destroy the Euro, UKP, JPY and finally USD. Got gold yet?
  -
• See also Reggie Middleton’s excellent blog : It Should Be Obvious To Many That The Risk Of Defaulting Sovereign Bonds Can Spark A European Banking Crisis!
  -
  UK banks abandon eurozone over Greek default fears
  By Harry Wilson, http://www.telegraph.co.uk/
  UK banks have pulled billions of pounds of funding from the eurozone as fears   grow about the impact of a “Lehman-style” event connected to a Greek default.
  -
  Senior sources have revealed that leading banks, including Barclays and Standard Chartered, have radically reduced the amount of unsecured lending they are prepared to make available to eurozone banks, raising the prospect of a new credit crunch for the European banking system.
  -
  Standard Chartered is understood to have withdrawn tens of billions of pounds from the eurozone inter-bank lending market in recent months and cut its overall exposure by two-thirds in the past few weeks as it has become increasingly worried about the finances of other European banks.
  -
  Barclays has also cut its exposure in recent months as senior managers have become increasingly concerned about developments among banks with large exposures to the troubled European countries Greece, Ireland, Spain, Italy and Portugal.
  -
  In its interim management statement, published in April, Barclays reported a wholesale exposure to Spain of £6.4bn, compared with £7.2bn last June, while its exposure to Italy has fallen by more than £100m.
  -
  One source said it was “inevitable” that British banks would look to minimise their potential losses in the event the eurozone crisis were to get worse. “Everyone wants to ensure that they are not badly affected by the crisis,” said one bank executive.
  -
  Moves by stronger banks to cut back their lending to weaker banks is reminiscent of the build-up to the financial crisis in 2008, when the refusal of banks to lend to one another led to a seizing-up of the markets that eventually led to the collapse of several major banks and taxpayer bail-outs of many more.
  -
  While the funding position of UK banks is far stronger now than it was back in 2008, the banking systems of several other major European countries, including Spain, Germany and Italy, are showing increasing signs of weakness. Analysts at UBS have warned that eurozone banks are “particularly exposed” having not done enough since the crisis to cut their reliance on the   wholesale funding markets and remain acutely sensitive to the withdrawal of   liquidity from the inter-bank market.
  -
  Simon Adamson, a banks analyst at CreditSights, said it was clear many eurozone banks had been having trouble funding themselves for several months.
  -
  … for the full article click here!

end