Ireland: Which Country has the Greatest Exposure

Over the weekend, the U.K. announced that they are willing to offer Ireland a direct loan of GBP7 billion. With a large budget deficit of its own and the prospect of austerity measures that is expected to dampen growth, many critics have wondered if the U.K.’s government’s proactive offer is in the country’s best interest. Unfortunately the answer is yes because U.K. banks are heavily exposed to Irish banks. As BoE Governor King pointed out last week their exposure is “by no means trivial.” While “the direct holdings of Irish sovereign debt are not especially large,” the ownership “of securities issued by Irish banks are bigger and of course there are wider exposures to assets comprising loans to the Irish economy more generally.” Of all the major countries, the U.K. has the biggest bank exposure to Ireland, followed by Germany. To prevent a banking crisis of their own, the U.K. government felt the need step up and provide support to Ireland before is too late.

The Guardian has some wonderful charts and tables detailing to exposure of various countries. It is definitely worth a look. Here is sample. Click on the image to access their full Datablog on which countries are most exposed to Ireland and who will be next.

About Kathy Lien 235 Articles

Kathy Lien is an Internationally Published Author and Chief Strategist of, one of the world’s most popular online websites for currency research. Her trading books include the highly acclaimed, Day Trading the Currency Market: Technical and Fundamental Strategies to Profit form Market Swings (2005, Wiley); High Probability Trading Setups for the Currency Market E-Book (2006, Investopedia); and Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game (2007, Wiley). As Chief Currency Strategist at FXCM, Kathy is responsible for providing research and analysis for DailyFX, the research arm of FXCM. She also co-edits the BK Forex Advisor, an Premium Service with Boris Schlossberg – one of the few investment advisory letters focusing strictly on the 2 Trillion/day FX market.

Kathy is also one of the authors of Investopedia’s Forex Education section and has written for, the Asia Times Online, Stocks & Commodities Magazine, MarketWatch, ActiveTrader Magazine, Currency Trader, Futures Magazine and SFO. She is frequently quoted by Bloomberg, Reuters, the Wall street Journal, and the International Herald Tribune and has appeared on CNN, CNBC, CBS and Bloomberg Radio. She has also hosted trader chats on EliteTrader, eSignal and FXStreet, sharing her expertise in both technical and fundamental analysis.

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