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Greece, the Euro, and the ECB: Is It Time to Panic?

Amanda Alix
September 10, 2012

Now that the European Central Bank has decided on a bond-buying spree to aid the troubled economies of Italy and Spain, all eyes turn with renewed hope to the meeting between Greek Prime Minister Antonis Samaras and ECB head Mario Draghi on Sept. 11. Clearly, the future of Greece and the euro is still uncertain, and U.S. banks have been taking steps to limit their losses if that country is ousted from the euro and reverts to its former currency, the drachma.

Consideration of Greece's request for more time to meet deadlines for bailout funds has been put off until the troika report, currently being compiled by Greece's major international creditors, is released in early October. Last month, leaders of France and Germany both assured the Greek president that they want Greece to stay in the eurozone.

Banks aren't buying it
U.S. banks have had their doubts about Greece's recovery for some time and began preparing for the worst almost a year ago. The biggest banks have decreased their exposure to Greece's and other troubled European nations' economies significantly and are planning emergency action if Greece suffers a meltdown caused by its exit from the eurozone.

Bank of America (NYSE: BAC