Bank Risk, The New Threat: How credit insurance mitigates this type of exposure

By Ron Doyle

Sovereign entities and various state governments have trillions of Euros in debt, and they continue to run deficits, which will have to be financed. Household debt also continues to rise. Who holds most of this debt? Banks!

The various agencies responsible for monitoring the finances of banks are increasingly concerned and are subjecting more banks to “Stress Tests” to determine if their Balance Sheets would withstand a major drop in the stock markets and increased unemployment. While the interest of government regulators is to be expected, what is more telling and of more concern, is the perception that banks themselves are becoming more restrictive in lending to one another.

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