Debt Fears Increase On Both Sides Of The Atlantic

European Banks See Debt Threat In U.S. As Well As At Home -- Washington Post

The deadlock in Washington over how to avoid a government default increasingly threatens to strike another blow to Europe’s ailing financial system because of the tremendous sum of Treasury bonds and other U.S. debt held by banks across the Atlantic.

If the United States defaults and its top-notch credit rating is downgraded, European banks may have to add to the reserves they set aside as a safeguard because of the heightened risk they would lose money on the U.S. bonds. European banks hold nearly half a trillion dollars in U.S. debt.

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My Comment: The U.S. is not the only debt threat on the economic horizon, Europe is in a precarious place also.

Update: Oh-oh.