IMF Needs to Address EU Insolvency Issues
The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (TheStreet) -- The IMF is the key organization in the world's complex currency system. It was founded in the immediate post-World War II period (Bretton Woods) and is an important regulator of the currency system now that the world's major currencies are all fiat (no real asset backing or restraints).
The European banks, which hold $72 billion of Greek debt and $165 billion of loans to Greece's private sector, could muddle through a Greek default, but most would be severely wounded -- with significant consequences for European growth in the near term.Now, here is the crux of the issue. If Greece is allowed to restructure, what is to prevent Ireland from following suit? Look at the exposure of the European banks to Ireland:
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV