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 The often used phrase "sovereign debt-crisis" happily lumps the PIIGS (Portugal, Ireland, Italy, Greece and Spain) into the same collective boat, but each national crisis has its own characteristics that make the likelihood of default different from country to country.
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 The current notional value of outstanding global financial derivative contracts stands at close to $600 trillion. That’s quite a figure; roughly ten times annual global GDP. Only 10% of these derivatives flow through regulated exchanges, with 90% traded “over-the-counter” on a bilateral basis between institutions. At the moment there is little reliable information on what goes on in the “OTC” market. From a risk perspective current proposals to increase transparency and adjust capital requirements make good sense. On the flipside, if properly implemented they may shine a light on a dark place and impose an unmanageable burden on industry participants, who are already under-capitalised.
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 Amidst the staggering news flow of the past few weeks, Ireland’s debt crisis and its status in the Eurozone, has been relatively low on the international agenda, but potentially epoch making for Irish people. Ultimately, Ireland will have to default on some of its obligations – they have grown (and will continue to grow) to the point where they are simply too great to sustain. The new coalition government needs to play their hand with subtle aggression. Burden sharing is a compulsory goal, but it should be sought in the first instance for good behaviour – follow through on public sector reform, austerity and hitting economic growth targets. The nuclear option of non-payment and euro withdrawal should be held in the background.
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The often used phrase "sovereign debt-crisis" happily lumps the PIIGS (Portugal, Ireland, Italy, Greece and Spain) into the same collective boat, but each national crisis has its own characteristics that make the likelihood of default different from country to country.
//
Read More
Amidst the staggering news flow of the past few weeks, Ireland’s debt crisis and its status in the Eurozone, has been relatively low on the international agenda, but potentially epoch making for Irish people. Ultimately, Ireland will have to default on some of its obligations – they have grown (and will continue to grow) to the point where they are simply too great to sustain. The new coalition government needs to play their hand with subtle aggression. Burden sharing is a compulsory goal, but it should be sought in the first instance for good behaviour – follow through on public sector reform, austerity and hitting economic growth targets. The nuclear option of non-payment and euro withdrawal should be held in the background.
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