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Sgard, Jérôme

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Le Monde - France | 06/09/2011

Europe's banks facing meltdown

The drop in the value of European bank securities highlights the dangers looming over the banking sector, political scientist Jérôme Sgard comments in the left-liberal daily Le Monde: "Even if the euro can't be destroyed, the same doesn't hold for the European banks. Their downfall is the nightmare of authorities in Frankfurt, Brussels, Berlin, Paris and elsewhere. These banks in fact hold a large part of the debts of Greece, Ireland, Portugal and Spain. So as has been said many times before, the default of any one of these countries would do much to destabilise the banks. Uncertainty over their ability to absorb the shock could lead the financial markets to exclude them, more or less violently, from trading. Worse yet, savers could rush to the cash machines and bank counters as happened in Argentina in 2001. That would be tantamount to a sort of banking Fukushima."

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