Nobel economist Joseph Stiglitz has a warning for the clutch of eurosceptic candidates bidding for power in the first round of the French elections on Sunday.
If they sweep into contention and markets sniff a serious risk of euro rupture - whether a soft or hard Frexit - they must expect to deal with a systemic bank run. Events could spin out of control in short order.
Hedge funds would act long before the machinery for a euro referendum was in place. It is far from clear whether the back-stop safeguards of the European Central Bank would function in such fast-moving circumstances.
“There is a lot of liquidity in the system and that makes it easier to launch a run on the banking system,” he told the Daily Telegraph.
“The attack would be so relentless that even Mario Draghi’s commitment to do ‘everything it takes’ might not be enough. The country could wind up facing a situation of no choice...
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