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.... a readers comment from today Telegraph online - if True - it could explain why the UK Government has been so insistent on unity within the Euro - what does the CUK economists think - True or False ??
The City is responsible for the issuing of nearly half of all the CDS contracts in the world.
The nature of CDS contracts is that each debt is insured at least ten times.
This means that if the underlying debt defaults, the sellers of CDS contracts will have to pay out ten times the value of the defaulted debt.
If Greece defaults on its 320 billion euro debt, it could result in CDS claims for 3.2 trillion euros.
Since nearly half of all CDS's are issued from London, the City could be liable to pay out at least 1.5 trillion euros.
In the unlikely event of an Italian default on its 1.8 trillion euro debt, the City could be faced with obligations of almost 9 trillion euros which is almost 8 trillion pounds.
On top of that there are the effects of contagion on other eurozone members, which could more than double City losses to around twenty trillion pounds.
.... a readers comment from today Telegraph online - if True - it could explain why the UK Government has been so insistent on unity within the Euro - what does the CUK economists think - True or False ??
The City is responsible for the issuing of nearly half of all the CDS contracts in the world.
The nature of CDS contracts is that each debt is insured at least ten times.
This means that if the underlying debt defaults, the sellers of CDS contracts will have to pay out ten times the value of the defaulted debt.
If Greece defaults on its 320 billion euro debt, it could result in CDS claims for 3.2 trillion euros.
Since nearly half of all CDS's are issued from London, the City could be liable to pay out at least 1.5 trillion euros.
In the unlikely event of an Italian default on its 1.8 trillion euro debt, the City could be faced with obligations of almost 9 trillion euros which is almost 8 trillion pounds.
On top of that there are the effects of contagion on other eurozone members, which could more than double City losses to around twenty trillion pounds.
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