The WSJ ran this chart in an article, which highlighted the risks that the major US banks, Citi, JPM, BAC, MS, and GS face if these countries default.
I would say the exact opposite. Even if one uses gross exposure, the cumulative total is less than $70 billion. While in the worst case scenario this might require a decent size capital raise, it pales in comparission to these banks assets. Additionally, countries like Germany and France have exposure in the hundreds of billions of dollars range.
Based on this chart, there is little to be worried about if the PIIGs default. The big problem would be contagion, which we have warned about for many months. The markets are now starting to fear that the complete inaction of the European leaders, will hurt Germany, France and the other ‘safe’ countries in Europe.
Until the ECB and Germany decide on a plan, there is reason to be concern about the European situation. However in terms of just the PIIGs defaulting, the problem appears far less serious than that which faced the banks in late 08.