Nov. 27 (Bloomberg)—Dubai’s debt woes may worsen to become a “major sovereign default” that roils developing nations and cuts off capital flows to emerging markets, Bank of America Corp. said.
“One cannot rule out—as a tail risk—a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way that Argentina did in the early 2000s or Russia in the late 1990s,” Bank of America strategists Benoit Anne and Daniel Tenengauzer wrote in a report.
A default would lead to a “sudden stop of capital flows into emerging markets” and be a “major step back” in the recovery from the global financial crisis, they wrote.
Continue reading Dubai Crisis May End in ‘Major’ Default, BofA Says . . .
Also:
- Dubai – Wikipedia
- RBS Led Dubai World Lenders; HSBC Most at Risk – Bloomberg.com (27 Nov 09)
- Dubai World Seeks to Delay Debt Payments as Default Risk Soars –
Bloomberg.com (30 Nov 09) - Dubai’s Threat to U.S. Banks – CNN Money (27 Nov 09)
- Fears Over Dubai Send European Shares Tumbling – Times Online (26 Nov 09)
- Dubai Woes Give China Chance to Buy Oil, Gold – abc News (29 Nov 09)