UK banks have massive exposure to Ireland
It has been revealed that the UK banking sector has by far and away the largest exposure of any European country to the Irish economy. Official data suggests that UK banks have exposure in excess of $230 billion which does not compare favourably to that held by the likes of Germany which is estimated to have exposure of around $175 billion.
There is still concern that this exposure, much of which is to the private sector, could crumble in the short to medium term with growing fears that the Irish economy is still on the verge of collapse. It is unclear to what extent the European Union would step in if the Irish economy was on the verge of collapse because there is a distinct lack of EU funding in the short-term. When you also consider that the European Union has made it very clear that any financial difficulties within the EU would lead to the countries in question "feeling the pain" as opposed to a full blown bailout, it does not bode well for the future.
If this was the case there is no doubt that UK banks, and other banking institutions involved in the Irish economy, would be expected to shoulder their fair share of the burden.
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