FINANCIAL TIMES: Greece no longer holds the dubious honour of being centre stage in the eurozone crisis. In the event of its exit from the euro, the country would be a mere support act. It’s Spain that would be the headliner, investors now fear.
Fears about contagion from Greece have pushed Madrid’s stock market to 2003 levels and its premium to borrow over Germany to euro-era records. Long-held worries about the health of Spanish banks have given rise to concern about the chance of bank runs, the worst nightmare of policy makers and investors alike.
“The big risk in Europe now is Spain,” says Stephane Deo, European economist at UBS. He says he is fielding many questions from investors about the state of the banks: “My main worry is the potential for a bank run.”… (more)
