April 30, 2010 – GreeceâÂÂs debt troubles are well known. Less recognized is the worrying truth that Greece is just the tip of the iceberg.
There have been plenty of waings. These include, for example, the recent downgrades of the debts of Spain and Portugal. By highlighting the risks, the debt rating agencies have sent a signal with one certain outcome. Heightened awareness over sovereign credit risk will grow, and rightly so.
A report released just last month by the Bank for Inteational Settlements, entitled âÂÂThe future of public debt: prospects and implicationsâÂÂ, made some startlingly frank and sobering conclusions. The BIS report began eaestly:
âÂÂSince the start of the financial crisis, industrial country public debt levels have increased dramatically. And they are set to continue rising for the foreseeable future.âÂÂ