Uncontrolled greek default - effect on UK banks

john_k_5

I am seeking views from sage people on what would be the likely effect on the UK banking system of an uncontrolled greek default, which is now looking increasingly likely based on today's news of a greek referendum on whether greece should continue with the austerity measures imposed by the EU.

(p.s please move this thread to a more suitable forum if required)

TDM850

Hi John. Difficult to say, although there are many in the market that believe a 'natural' default needs to occur in order to get the market back to accurately reflecting the value of UK Plc and the economy. I personally believe that with the FTSE at round previous resistance levels at 4750 ish, and with the likes of Barclays at around 140p, a Greek default and exit from the Euro had been priced in. Interesting debate on this at the Traders Own forum - many believe that Eurozone stability was undermined by its own leaders long before Greece thought of having a referendum. In fact the Telegraph at the weekend gave the Eurozone a matter of days or weeks at best. The next few days will be a roller coaster ride without doubt.

pqrdef

Once the credit default swaps are triggered, nobody knows where the losses will end up. The money market stops, because nobody knows who's bankrupt. Everybody is waiting to find out whether their debtors are still solvent. People go bust who aren't exposed to Greek debt, because they can't refinance. Forget about your money and stockpile corned beef.

mr_fishbulb

pqrdef wrote: »

Once the credit default swaps are triggered

They may not be though - http://www.reuters.com/article/2011/10/26/greece-derivatives-idUSL5E7LQ3DZ20111026

pineapple

pqrdef wrote: »

Forget about your money and stockpile corned beef.

I've been sneered at on this very forum for suggesting similar. If not corned beef - things like, flour, pasta, tinned fish, rice, tea, coffee, condiments etc have a long shelf life and are worth getting in.
Hands up those who think prices will go down! At best worsening inflation, at worst hyperinflation.
Look - we live in unprecedented times. We've had Merkel and others even alluding to war. There are people in other countries being asked to take a cut in their existing pension.
No one can say for certain how this will pan out. Did you know there are only about 3 days worth of food in a supermarket in a panic situation?
How I wish I'd listened to those saying 2 years back that this would happen and to invest in gold and similar. Second best is to invest in food.

Paul_Herring

mr_fishbulb wrote: »

They may not be though - http://www.reuters.com/article/2011/10/26/greece-derivatives-idUSL5E7LQ3DZ20111026

That's talking about the 50% haircut; not a default which is what the OP was asking about.

horace_2

john_k wrote: »

............

what would be the likely effect on the UK banking system of an uncontrolled greek default, which is now looking increasingly likely......... QUOTE]


Probably exactly the same as a `controlled` default what ever that is.

h

oldvicar

pqrdef wrote: »

Forget about your money and stockpile corned beef.

pineapple wrote: »

I've been sneered at on this very forum for suggesting similar. If not corned beef - things like, flour, pasta, tinned fish, rice, tea, coffee, condiments etc have a long shelf life and are worth getting in.
Hands up those who think prices will go down! At best worsening inflation, at worst hyperinflation.

Anyone remember the sugar crises in the 1970s? I remember that during the first one my old gran bought sugar wherever she could find and stockpiled it. It lasted her ages, until the start of the next crisis when she started filling the cupboards again. Mind you, she had seen the shortages during and after the war.

However I am inclined to agree that the risk of high inflation does feel greater if Greece (and Italy etc) go under. But I can't think WHY I feel this.

Anyone with economic theory to explain any impact on our (UK) inflation if the economies of some neighbouring countries collapses?

MrRee_2

I have said it before and I'll say it again ..... if the EuroZone goes under, as looks likely, we in the UK will have our savings wiped out - there will be runs on the Banks like you have never seen before.

There isn't enough money to safeguard everyones £85000 - of that it's certain!

The best offer will be around 25p for every £1 invested - it's the fairest way to distribute what's left.

And this is the single reason that property is now getting snapped up fast, at least you have something you can touch, feel and enjoy .............. get OUT of Cash NOW!

dealer_wins

I am going to start stockpiling BS as from now. Ive got my printer switched on and will start printing out all the nonsense posts I can find, starting with the one above LOL

john_k_5

Yes indeed. Forum trolls at their worst. I guess I did post this on the wrong board after all. I have noticed another board on this site entitled 'Debate House prices & the economy' where similar topics are being discussed in a more considered manner. However for some reason I am not even able to see that other board unless I log in.