Counterparty risk

Europe is teetering on the edge of a credit crisis, and markets all around the world are tumbling as investors worry about contagion.

Its all about banks not trusting each other, as Senior Editor Paddy Hirsch explains.

Category:

Education

Tags:

• marketplace
• whiteboard
• italy
• greece
• portugal
• spain
• ireland
• debt
• lending
• banks
• freeze
• credit
• finance
• economy
• paddy
• hirsch

[MixMeAdrink]

Doesn't banks sign agreement with each other that bond them to a contract that dictate a certain amount of time before the issuer have to pay the principle back (plus interest)? If the payee take the loan back, won't that be consider a breach in the contract?

[AryuDahme]

I always get excited during the end of the video. Most likely because he's wrong about how I need a drink. Because I need to urinate. Badly. But, these videos are so informative D:

[soniceguybutsonice]

great guy, nice videos, very informative with great sense of humor. Good work! Please keep it up!

[jasonissober]

will u make any videos about MRS, MU, indifference curve those stuffs

[ijustinsane]

@sheikhsk Yea...

[liquidus2172]

oops, somebody already told us this is coming !

[sheikhsk]

wow, so now what's happening is that we have a credit crunch again, but this time it doesn't involve financial institutions but the whole countries and their governments right? that's scary !

[rajneeshkpandey]

thanks a lot!!

[octdavian]

Well Done!!!!!  Too bad this can't be put on the nightly news.

[mdote23]

part 3

lastly, wouldn't the spanish bank have an incentive to put up collateral that is of the lowest quality? Or are they unaware of the type of collateral they hold too? could you clarify how this works

thanks, great video