Financial Contagion Quotes

Greece is at a dangerous crossroads. Other countries-Portugal, Ireland, maybe Spain-are coming behind it.

An AIG failure would have been devastating to the financial system and to the economy.

The very nature of finance is that it cannot be profitable unless it is significantly leveraged... and as long as there is debt, there can be failure and contagion.

Few in Europe imagined the incompetence and dishonesty of Greek economic managers would bring the entire European project into question.

Well what would happen is that if Greece defaulted and couldn't pay its debts, all the Greek bonds that are held in other banking systems across Western Europe would suddenly have no value. You could as a knock-on effect create a banking crisis in Western Europe.

If AIG had tried to unwind their derivatives books. I don't know. It would have hit every institution in the world.

And people really behaved in a fraudulent way or something, we'll go back and find the culprits later on. But that really isn't the problem we have. I mean that's where it came from, though. We leveraged up and if you have a 20 percent fall in value of a $20 trillion asset, that's $4 trillion. And when $4 trillion lands - losses land in the wrong part of this economy, it can gum up the whole place.

The plague of gold strikes far and near.

I and others were mistaken early on in saying that the subprime crisis would be contained. The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict.

Money is like any other virus: once it has rotted the soul of the person who houses it, it sets off in search of new blood.

But the world is ever more interdependent. Stock markets and economies rise and fall together. Confidence is the key to prosperity. Insecurity spreads like contagion. So people crave stability and order.

History tells us that sharp reversals in confidence occur abruptly.

We have no exposure in Europe and not made any finances to the companies there. So the question of Greek debt crisis impacting the bank does not arise.

We have already seen some instances of systemic risk in recent times in the Asian financial crisis. But what sparked off the Asian financial crisis? Automated trading programmes!

When a large financial institution is allowed to fail, you put in jeopardy hundreds of thousands, if not millions, of people.

Greece's debts are all denominated in euros, but it isn't clear who holds how much of those debts. For that reason, the consequences of a national bankruptcy would be incalculable. Greece is just as systemically important as a major bank.

We cannot allow the bankruptcy of a euro member state like Greece to turn into a second Lehman Brothers.

The most compelling economic and geopolitical story in 2017 will almost certainly revolve around China. The world's most populous country bankrolled an economic boom with high levels of debt and leverage, with which the government is now forced to reckon.

When a bank calls in a loan, it obviously hurts the customer in question. But it also adversely affects other banks that have lent to this borrower. They are now less likely to be repaid and so can't as readily lend to their own customers.

Even if the Brits decide to remain, we will have to avoid a contagion on other countries.

China's stock market is not very big. And yet when stock market has a bad day in China, it seems, Europe has a bad day and then we have a bad day.

There was a time when if you had a financial crisis in Southeast Asia somewhere, it had no impact on our markets. Today it does.