U.S. banks have little direct exposure to the Greek economy, only about $5 billion. The problem is indirect exposure. European banks, particularly those in Germany and France, own large amounts of Greek government debt, which will become worthless if Athens defaults.
“Immediately, there would be a credit crunch.”
Tu Packard is a senior economist with Moody Analytics. She says that European policy makers, particularly central bankers, would need to intervene in a big way to keep such banks afloat. If they fail, the U.S. will have a much bigger problem on its hands.
“U.S. exposure to European banks is over $3.4 trillion, so it’s over 60% of U.S. exposure to the whole world.”
A credit crunch on that scale could easily dry up global trade financing, as happened in the wake of the 2008 financial meltdown. That means Houston would take a beating.