A cascade of defaults and lawsuits would follow.
Other weak sovereign borrowers might follow, intentionally or not, creating a cascade of traumatic defaults.
— Regulators on Friday shut down banks in Florida, Arizona and Kansas, bringing to 133 the number of United States banks that have failed to hold up this year against the struggling economy and a cascade of loan defaults.
Financial institutions have strengthened their balance sheets since the 2008 financial crisis, but they could be in for a turbulent year if potential flashpoints such as emerging markets or the energy sector produce a cascade of debt defaults.
The government does not want to trigger a collapse in confidence and a cascade of loan defaults and bankruptcies, not to mention the lay-off of millions of construction and industrial workers.
Fed policy makers now contend that the consequences of not coming to the rescue would have been a cascade of bankruptcies and defaults on Wall Street that could have undermined the financial system and risked severe damage to the economy.
In particular, that means offers of unlimited two-year liquidity from the ECB, which was due to meet after The Economist went to press.Herding EurocratsAbove all, no amount of recapitalisation would be enough to protect banks from a cascade of euro-zone defaults.
Two months later -- after a cascade of late fees, penalties, default notices and dings to his credit history -- Shukran, concerned that Save My Home was trying to scam him, decided to resume making his mortgage payments.
Companies that have borrowed from abroad in euros would have no choice but to default, resulting in a cascade of failures and yet another surge of unemployment.
Policy makers have been unnerved by the rise of the market because they are worried that sellers of protection may not have enough reserves to pay future claims and that default by one party could lead to a cascade of failures throughout the financial system.
That's because the threat of a disorderly Greek default – which could still take place inside the euro – has the potential to trigger a cascade of bank runs and knock-on crises across the eurozone whose impact could dwarf the Lehmans crash of 2008.
