Breakdown Of Greek Talks Threatens Biggest Crisis Since Lehman Crash

June 29, 2015

UK won't be able to avoid the fallout: ALEX BRUMMER says breakdown of Greek talks threatens biggest crisis since the Lehman crash

The breakdown of talks between the eurozone and Greece threatens the biggest crisis for the global banking system and economic confidence since the crash of the American investment bank Lehman Brothers seven years ago.

The total output of Greece may represent only a small fraction (1.3 per cent) of the European Union’s total.

But the financial tentacles of Athens reach far and wide, from the Balkans to the main European financial capitals, New York and the City of London. The temporary shutdown of Greek banks and financial markets today will only exacerbate the panic.

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The scenes of Greeks rushing to automatic teller machines to pull out euros provide a reminder of events in 2008, when the cash machines of Royal Bank of Scotland and HBOS came within hours of running dry

In globalised banking and financial markets, no one can be absolutely sure where the pieces will fall.

What is certain, however, is that the scenes of Greeks rushing to automatic teller machines to pull out euros provide a painful reminder of the events of the autumn of 2008, when the cash machines of two of Britain’s biggest financial groups, Royal Bank of Scotland and HBOS, came within hours of running dry.

Financial crashes are like floods where water leaks its way through the weakest crevice in any structure and cascades downwards. If Greece is allowed to fail, the whole edifice of the eurozone will come under pressure.

Source - http://www.dailymail.co.uk/news/article-3142543/UK-won-t-able-avoid-fallout-ALEX-BRUMMER-says-breakdown-Greek-talks-threatens-biggest-crisis-Lehman-crash.html