Tuesday, November 16, 2010

Report: European Crisis team heads to Ireland

by Calculated Risk on 11/16/2010 07:45:00 PM

The Financial Times is reporting that a Debt crisis team heads for Dublin. This team includes IMF, European Central Bank, and European Commission officials - personnel from the same agencies who visited Greece right before that bailout. Although this is just a "discussion", the Financial Times suggests this is sign "a bailout for the country’s ailing banks is imminent".

And from the WSJ: Banks' Exposure Stirs EU Contagion Worries

All told, European banks were sitting on more than $650 billion of exposure to Ireland as of March 31, according to the Bank for International Settlements.
A bailout of the Irish banks is a bailout of European banks (especially UK and German banks).

By request, here are links to the sovereign debt series from "Some investor guy" posted earlier this year:

  • Part 1: How Large is the Outstanding Value of Sovereign Bonds?

  • Part 2. How Often Have Sovereign Countries Defaulted in the Past?

  • Part 2B: More on Historic Sovereign Default Research

  • Part 3. What are the Market Estimates of the Probabilities of Default?

  • Part 4. What are Total Estimated Losses on Sovereign Bonds Due to Default?

  • Part 5A. What Happens If Things Go Really Badly? $15 Trillion of Sovereign Debt in Default

  • Part 5B. Part 5B. What Happens If Things Go Really Badly? More Things Can Go Badly: Credit Default Swaps, Interest Swaps and Options, Foreign Exchange

  • Part 5C. Some Policy Options, Good and Bad

  • Part 5D. European Banks, What if Things Go Really Badly?