A study by "Globes" has found that Israeli banks have an estimated $10-20 million exposure to Greece and Portugal. Since the exposure is not from lending but derives from trade credit, no problem is foreseen, and the actual exposure to events in Greece is negligible.
Although Israeli banks have large exposure to Western European banks which hold Greek debt, bankers see little cause for concern, because the French and German governments will support their countries' banks if necessary. However, if the debt crisis spreads to large countries such as Spain or Italy, the exposure of Israeli banks could reach hundreds of millions of dollars.
A top banker said, "The day where there is a real debt problem in a big country, such as Spain or Italy, our problems won't be there, but with State of Israel bonds. Anyone who thinks that if confidence in sovereign debt of European countries is undermined, yields on government bonds in Israel will not be affected, is deluding himself."
Leader Capital Markets VP research Alon Glazer is not worried about financial exposure in the banks' bond portfolios, but about non-financial exposure. He believes that the banks have few European bonds, and almost no exposure to the countries rated as problematic. "If margins widen, obviously the banks' securities' portfolios will be hurt, but we're not on the way back to 2008," he said.
Published by Globes [online], Israel business news - www.globes-online.com - on May 2, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010