Sovereign debts have become toxic assets

• Ionel Blănculescu: The banking system has already caught the virus

• Europe and America, worried over the Greek situation

The Greek crisis could pass the borders of Europe and extend to the entire world, European and American officials warn.

The situation of the Greek state could become a threat for the stability of the world"s financial system, if a solution is not found, Ben Bernanke, the chairman of the Federal Reserve (FED), said yesterday, according to AFP.

He said: "The failure of the efforts to defuse this situation, threatens European and global financial system and Europe"s political unity".

Ben Bernanke added that the American authorities are "communicating closely" with those of Europe, with the mention that the United States of America are not participating in the negotiations, but its have been "closely informed".

The statement of the chairman of the FED was issued on the same day as the warning issued by Jean-Claude Trichet, the president of the European Central Bank (ECB), who warned about the effects that the Greek crisis could have in the European Union.

The risks to the stability of the Eurozone "signal red" and the sovereign debt crisis is close to "infecting banks", he said, according to Bloomberg.

The president of the ECB said: "I for one would say that the red lights are on. The message of the Council (ed. note: the European Systemic Risk Council) is that the mounting debt crisis is "the most serious threat" to financial stability in the European Union.

• Ionel Blănculescu: It is not just about the banks" exposure to Greece, but to Spain, Portugal and Ireland as well

Romanian analysts claim that the warning signs from the abroad merely confirm the current state of things.

Economic analyst Ionel Blănculescu said yesterday that the banking system is already infected. The situation is already similar to that of Argentina where, after 11 years, the bonds still haven"t been redeemed, he claims. "The government bonds have become toxic assets just like it happened in Argentina", Ionel Blănculescu said.

The reason why Greece ended up in the current situation is the fact that banks bought bonds, and when the time came for them to be redeemed, they found that the state couldn"t give them their money back, the economic analyst says.

"In the European banking system, lenders from France, Germany and Italy bought government bonds, which the latter was supposed to be redeemed upon maturity", Ionel Blănculescu said.

Now, banks are pressuring European officials to help them recoup their losses using the money of the European taxpayers, the economic analyst explained.

"Everything is infected at the moment. The solution for this would be to give the money to the banks, but you can"t do it, or to stop the crisis, but you don"t have any way to do it", Ionel Blănculescu said.

He added that the whole problem is not just about banks" exposure to Greece, but to Spain, Portugal and Ireland as well.

• Călin Rechea: The red light should have started blinking a long time ago

"The picture was already broken. The red lights should have started blinking much sooner", Călin Rechea, economic analyst said yesterday.

He added: "What Trichet is saying isn"t very accurate, when he says that sovereign debts will infect the banks. Of the most part, it is because of banks that it has come to this. Countries injected huge amounts of money into the banking system and then they borrowed from the banks themselves. This isn"t anything unexpected. The red light should have started blinking a long time ago".

Mr. Rechea considers that this issue is not confined to the European banking system alone.

• Florin Cîţu: Some banks are undercapitalized

Analyst Florin Cîţu considers that the issue of the banking system of the European Union is the fact that some banks are undercapitalized, Romanian lenders included..

Florin Cîţu said that it is important to note how many of the domestic subsidiaries of the Greek banks own Greek bonds.