There was some major speculation about the Collective Action Clauses in Greek sovereign bonds – or rather the lack thereof.

Reference: FTD

The above reference to a German newspaper has some graphs that are informative.

  • One should start noting, that the German Bank: Deutsche Bank and Commerzbank have exactly equal amounts of bought and sold CDS. Even so with the French Societe Generale. These banks couldn’t care less if the Greek reconstruction was called a  “credit event” or not.
  • Some of the others – presumably through their British branches – do suffer minor “balance bruises”, but nothing to serious. There was a reason for Cameron stalking out of the EU meeting in fury. I Yours truly isn’t mistaken then he had just been told by Merkel and Sarkozy that the funny movements of hedge funds in Greek sovereign bonds and CDS would not be a French or German problem; but solely a British.

Presumably totally unrelated the following report:

But anyhow somebody has been told that passing bills to the British taxpayer is not without cost.

On a more reflective note:

It seems somewhat naive to speculate against the German and French interests – as if a German and a French secretary of finance didn’t know what they were up to – and had taken measures accordingly. What were hedge fund managers thinking? Presumably nothing – that was the mistake.

The German and French banks will suffer enough from the Greek bankruptcy; but they will not be played by semi-smart speculators. More than three years have passed since Lehman Brothers and it is unlikely to catch governments with their knickers down again.