BBH: Greece Is Not 'Too Big To Fail'

The oldest private bank, where Prescott Bush was a founding partner, Brown Brothers Harriman, is out with a commentary on the Greek financial crisis.

There conclusion is that Greece is not too big to fail, Further, they point out as we have that:

Greek officials know the real score. At 2-3% of the euro zone’s GDP, it is not too big to fail. The reason that European officials are hoping Greece does not default is not so much out of sympathy to be sure; rather what is at stake is unadulterated self-interest. Slightly more than half of Greek debt is owned by foreign investors.

The lion’s share is in Swiss, French, German and British banks. Some of the exposure may have been offset in the credit default swap market, but then impact on the fragile banking system could be simply overwhelming.

A very plausible scenario is that EU members bailout their own banks and let Greece sink.

A Greek bailout simply makes little sense. A bailout of EU member banks is a one time hit for the EU members and they move on with life, a bailout of Greece, meanwhile, would be a career, since it doesn't appear that Greece will draw up a budget that comes anywhere near being in balance.