 "Greece contagion could be worse than Lehman collapse, says Deutsche Bank CEO")
Adding to Greece’s woes, the chief executive of Deutsche Bank Joseph Ackermann said on Monday that the contagion of the country’s debt problems to the rest of Europe could be worse than the collapse of investment bank Lehman Brothers in 2008.
Greece needs 12 billion euros ($17 billion) in European and IMF aid to avoid a default on its debt mountain in mid-July that could spread contagion across the euro currency area and send shock waves around the world economy.
“If it is Greece alone, that’s already big. But if other countries are drawn in through contagion, it could be bigger than Lehman,” he said at a Reuters banking conference on Monday.
His words echoed statements top European Central Bank policymaker Juergen Stark made earlier, when he said the impact of a Greek debt restructuring on Europe’s markets could eclipse the insolvency of Lehman Brothers, which marked the start of the global financial crisis.
French banks have agreed to roll over holdings of Greek debt for 30 years, but no comparable deal has been reached in Germany so far.
Reuters
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