Posts
Slovenia - The Next Cyprus?
27
March, 2013
In
the seven days since Slovenia's new government has been in power,
their 10Y bond has seen its yield explode over 120bps as the
investing world searches for the next 'Cyprus'-like land-mine. Of
course, the Slovenian leaders are proudly denying it all, "Slovenia
won't need aid, we can do this on our own," but
with the nation needing EUR3 billion in bailout funding and the
previous government proposing a 'bad-bank' style breakup, one can
only imagine the capital outflows that are viciously
circling this
nation's financial system (given
the relative size of their large 'uninsured' depositor base as shown
here - SI). How
will they solve the problem? By tapping international bond markets of
course, "depending on market sentiment."
Charts:
Bloomberg
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