European Union Debt Crisis Stings France, Putting U.S. Banks at Risk
BY DAVID ZEILER
AUGUST 15, 2011
While investors in the United States have been preoccupied with the debt-ceiling crisis and volatile stock markets, the European Union debt crisis has worsened.
Now France is under suspicion, and if its debt troubles spiral out of control, then there’s a good chance the country will take U.S. banks down with it.
Despite denials from the major ratings agencies, some believe France could be in danger of losing its AAA credit rating, just as the United States did recently.
In fact, it was Standard & Poor’s unprecedented downgrade of the United States that put investors on notice that no nation was safe. France became a target because many of its large banks hold a lot of debt from troubled nations like Greece, and because France has a lot of debt of its own.