early warning signs we should watch out for it things get worse ?

AGP · 2009-06-26 09:28:34

I know there was been a bit of speculation earlier in the year about the possibility of the country going "bankrupt" (or needing emergency IMF / EU assistance), but what kind of early warning signs would there be to watch out for ? a run on the banks ? government unable to borrow more ? big downgrading of our credit rating…

26-06-2009 09:28AM

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AGP

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I know there was been a bit of speculation earlier in the year about the possibility of the country going "bankrupt" (or needing emergency IMF / EU assistance), but what kind of early warning signs would there be to watch out for ?
a run on the banks ? government unable to borrow more ? big downgrading of our credit rating ?

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#2 26-06-2009 09:33AM

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The yield on our bonds are the best early warning signs. People will demand a premium if they think we'll default, and that premium will go up with the likelihood of default.

The bond prices are high, and are costing us millions of euro, but the probability of default that they're indicating are something in the region of 5%. Nothing major imho.

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