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After Iceland, Switzerland next?
Lyndon LaRouche
Oct. 31, 2008 (LPAC)-- The leftist German website telepolis quotes Richard Portes of the London Business School, today, as warning that Switzerland and Great Britain as countries with a very big financial sector, could soon share the fate of Iceland.
Bank holdings alone are 7 times the Swiss GNO, and "short-term liabilities of the Swiss banks," he said, "are 13 times the Swiss GNP. In the case of Iceland, this factor was 5, that is less. This situation is potentially dangerous for Switzerland. Their banking sector is, at present, too big for the Swiss national bank to rescue it."
One should add that Switzerland is also heavily exposed, via carry trades, to emerging market loans, which alone are 50 percent of the Swiss GNP.