Sodium Haze: UK exposure to Greece around £365 Billion

Wednesday, 22 June 2011

UK exposure to Greece around £365 Billion

As the Haze strongly suspected - the UK exposure to a Greek 'credit event' would be more in the region of £365 billion and not the £2 billion quoted by the Government or the £8 billion ventured by the Bank of England.

All over Europe our rotten and creaking financial system is threatening to collapse - taking savings, pensions and jobs with it.

This is an extremely serious development - the true extent of the danger to economies all over Europe is only now emerging - and few people can consider themselves safe from the potential contagion. 

Why the huge discrepancy? Well in an order to avoid adding panic to an already fraught situation the government has failed to include UK exposure to those wonderful Credit Default Swaps.

The potential devastation of banks and other City institutions would be equal to 24% of UK annual national output, or £14,640 for every family in the UK.
Experts accused ministers of underestimating the true scale of the risk to the UK, as Channel 4 News revealed that estimates of potential exposure range as high as £366bn.
Danny Gabay, of Fathom Financial Consulting, which calculated the figure using data from the Department of Business, said:
'It's not the direct loan that's the problem, it's the derivatives of those loans which can go on to be multiples of the actual original size of the loan.

'London made a vast amount of money in the ten years before this crisis selling those loans. Those chickens may now be coming home to roost.'

Haze Comment:

Even IF BY SOME MIRACLE - the UK banks wriggle off the hook this time - we must demand as a nation an end to these incredibly dangerous financial gambling games.

Fractional Reserve Banking is bad enough but when you add the power of the 'casino economy' to magnify the damage many times over it is clear we must act.

The sale of these damn derivatives should end today. 

Join the Positive Money Campaign for a banking system that works in the public interest and not against it.

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