Monday, June 14, 2010

Betting on Failure

The Bank of England has warned that investors are taking a "punt" on there being a 20% fall in the value of the FTSE 100, arising from the possible collapse of a sovereign debtor, such as Greece and Portugal.

The Bank for International Settlements (BIS), coincidentally, reports that Britain has major exposure to the Irish and Spanish banking systems (also feared to be at risk).

Having reported the problem, it is likely that the Bank's warnings will be a catalyst for more bets to be taken out on such a fall.

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