As I write this article, the FTSE is a little over 6000, pretty much as it was when I was writing for the last issue of The Whistler. Not that interesting in itself, but having been down by some 400 points in the 2 months between, it shows the volatility – to which I referred in my previous article.

There are many factors involved in what moves the markets, but recently eyes have turned to Greece. The markets are not worried about Greece, the country; nor particularly about Spain, Ireland or Portugal (the so-called PIGS). What does concern them is the affect that the problems in these countries may have on the banking system within the Euro-zone. The Governor of the Bank of England, Sir Mervyn King, summed it up by saying “the direct exposure of any of the British banks to Greek debt is negligible. The unknown is anyone’s indirect exposure. It is nigh on impossible to trace the tree all the way through – what happens if a British bank has lent to a French bank who has lent to a German bank who has lent to an Italian bank who has lent to a Belgian bank, which is about to go under because it cannot take the losses on its portfolio of Greek debt?” The answer is that no-one knows.
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