Are the EuroZone woes a Problem for Online Banking
Are the EuroZone woes a Problem for Online Banking is a question that has to now be answered. The problems with Greece have had a roller coaster effect on the global markets and it has yet to stabilize. They have already received 2 bailouts that have cost the 17 nation EuroZone counties heavily and the problems still exist.
These continuing problems have made investing in the markets with your money a riskier venture than just a few years ago. The world has become accustomed to all types of banks including the online banks that have failed, but an entire country defaulting on its debt has not occurred since 2006. The last major country to default on its debt was Russia back in 1998.
A country defaulting on their sovereign bonds has been occurring since the before the 1700s. Most Americans have forgotten that back in 1782 the US government defaulted on its Revolutionary War debt. It took until 1790 before America was back on its feet financially.
Europe is more use to defaulting of their counties. Since the 1800’s 73 different ones of them have defaulted on their debt. Between 1820 and 1840, Spain did it three times. Between 1800 and 1900 Greece did it twice and again in 1932. The defaulting of a country is now the norm. What is unusual this time is that Greece is part of a group of countries that decided to share the same currency.
Because of this they could not adjust their bank rates to compensate the value of the currency. This is why it has affected the entire EuroZone, because the value of their shared currency is affected because Greece is a member state. This has made each of the banks in Europe and the world that purchased Greece bonds to lose value in their shares.
If Greece defaults it will probably not cause any bank failures, but will make their shares decrease in value. Their reactions will be to reduce the bank rates they offer their customers along with higher fees so they can recover their losses from their own bad investment. Does this sound familiar?
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Will Online Banking be the only Form of Banking Available in the Future | Online Banks on
Fri, 16th Sep 2011 6:02 am
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