First Trust’s Brian Wesbury, whose work is always worth consulting when one is desperately looking for reasons to look on the bright side, provides some perspective on the U.S. banking industry’s exposure to the PIIGS:
[T]he five largest US banks have only $54 billion in exposure to the debts of Greece, Portugal, Italy, Ireland, and Spain, combined, versus more than $700 billion in bank capital. In the early 1980s, when Latin and South American countries were defaulting, the eight largest US banks had exposure to those countries equal to 263% of capital.
There, I feel better already. . . U.S. banks’ counterparty risk vis-á-vis European banks loaded down with PIIG exposure is also highly overblown Wesbury says.