"Most of the assets are located outside of the jurisdiction and a sovereign could collapse with no impairment to the financial strength of the insurer".
The answer was, as it always has been in sovereign debt collapses, to write off part of the debt as unrecoverable, do a bit of domestic reform and pay back to the creditors as much as can be delivered.
It would have gone down the same road as Ireland – unaffordable bank bailouts, economic collapse, sovereign default and an EU/IMF "program" accompanied by brutal austerity measures.
The first is a rapid, obvious one — all about sovereign debt, a collapsing currency and austerity measures — that we hear about all the time.
Likelihood: 2/5 Euro thrives Bank collapse and sovereign default avoided; strong demand from US and China helps euro-members export their way out of trouble; David Cameron looks ridiculous.
BNP said over the past year the net inflow into European sovereign debt markets has "collapsed".
Without this radical level of monetary easing, the already anemic levels of economic growth, typically substantially below the proportion of fiscal deficits to GDP in many sovereigns, would almost certainly collapse.
But the moderates in Congress might not agree to the spontaneous"collapse"of another sovereign government.
Mr. King urged British banks to be especially diligent and clear in disclosing their exposure to European sovereign debt, to avoid a collapse of confidence among investors.
What is more, with tax increases unlikely and with Europe on the brink, the unthinkable — a sovereign debt default or the collapse of the credit system — has suddenly become thinkable.
