New Poll: Greek haircut
Moderator: Aitrus
New Poll: Greek haircut
Will the Greek private debt 50% haircut trigger a "credit event" on credit default swaps, forcing European banks to make big payouts?
Yes
No
Yes
No
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- Posts: 135
- Joined: Thu Oct 14, 2010 11:43 am
Re: New Poll: Greek haircut
Can you explain a little more? I'm not sure what you mean by "pay out".
Re: New Poll: Greek haircut
Many people bought insurance against that debt, so with a 50% haircut someone should be collecting.
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- Posts: 135
- Joined: Thu Oct 14, 2010 11:43 am
Re: New Poll: Greek haircut
Well technically, this wasn't a credit default. I'm betting that the banks will use that as an excuse and not pay out.
Re: New Poll: Greek haircut
Yea, not sure what will happen, but it is something to watch, because if that is the case, it sets a precedent going forward...........
Re: New Poll: Greek haircut
It wont trigger because this is a "voluntary" forgiving of debt by the banks, not a true default. It might have greater implications in that it basically makes the whole CDS market worthless if the countries are going to play semantic games like this, which in effect means going forward institutions will not have faith in CDS as hedges/insurance and thus will demand higher rates overall rather than taking on the debt and then getting insurance. Thats how I understand it at least.
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Re: New Poll: Greek haircut
Makes you wonder why one would play the game?
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