Goldman: Markets Ignore Grexit Threat Due To ECB QE, But If There Is A Grexit Then All Bets Are Off
by Tyler Durden
ZeroHedge.com
02/11/2015
It looks reasonable that investors would not ask for an additional compensation for a source of risk that has limited direct economic bearing for other asset classes…. Such a conclusion would cease to hold, in our view, if Greece were to leave the common currency. Indeed, ‘Grexit’ would constitute a non-diversifiable event, affecting all financial assets. This is because, upon the departure of one of its members, EMU would likely be seen as a fixed exchange rate arrangement between countries which can elect to adhere or leave. Convertibility risk would resurface, exposing the possibility of a collapse of the entire project.
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