Foreign banks that have made billions of dollars worth of loans to Greece
could be badly hurt by a default, and many of those banks are in France. French
bank and government officials tried to reassure markets that they have
sufficient money to cover any expected losses.
But investors are apparently still worried that a Greek default might hurt
French banks so badly that the French institutions would struggle to repay loans
they hold from banks around the world, including the United States. A report
that a key rating agency might downgrade some French banks further heightened
One economic expert, New York University Professor Neil Barofsky, says the
markets may be in turmoil for a while.
"You will continue to see this real crisis of confidence, continued
concern. In a way it is a little bit like 2008, nobody is sure exactly what is
going to happen if these dominoes start to fall. And I think it is kind of a
scary place right now," Barofsky said.