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:
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