Private wealth holders should keep eye on European "debt-bomb"

People with private wealth might want to pay close attention to the European "debt-bomb".

According to Bry Jones, manager of the Rathbone Ethical Bond Fund, events in Europe had taken "another" turn for the worse.

He explains that part of the problem was that funding support would not necessarily solve the problem on the continent.

He said: "Markets are less inclined to accept reassurances from the bureaucrats and are taking their cues from leaks on debt-restructuring. This is a good juncture to start de-risking the portfolio in light of what could be a very nasty mess."

In addition to that, it is the contagion to larger economies that looks highly dangerous.

Citing recent research, Mr Jones, who is also a fixed income director at Rathbone Unit Trust Management, said that, for example, Germany's banking exposure to the peripheral banks is a massive 80 per cent of Tier 2 capital.

In response to this he is avoiding banks with significant exposure to peripheral Europe and looking at those who have a healthy distance from any peripheral default event.

Rathbone Unit Trust Management Limited is a subsidiary of Rathbone Brothers Plc. They provide both unit trusts and Investment Companies with Variable Capital (ICVCs) to a wide range of investors.

If you would like to discuss how we can assist you further please contact us on Tel: +44 (0)20 32077400 or email.
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