UBS: Here Are The 19 Countries Most Likely To Default

italy protest

Photo: AP Images

Italy is being touted as the country that is too big to save. And with the ECB legally prevented from being a lender of last resort, an Italian debt restructuring is inevitable, according to Nouriel Roubini.Italian 10-year yields have exploded over 7% and clearing house LCH.Clearnet SA has raised the cost of trading Italian debt

With the the turmoil in Italy, Ireland is having a harder time convincing markets and investors that it could escape contagion. Meanwhile, Greece is still waiting on a new government.

As the European debt crisis continues, we drew on UBS analyst Andrew Cates’ aggregate balance sheet risk index to provide a snapshot of the financial fragility of countries that look most likely to default. The factors that help determine balance sheet risk include high cumulative credit outstanding, high banking sector leverage as measured by loan-deposit ratios, and substantial public sector debt as a percentage of GDP.

Note: All data is for 2010. The Balance Sheet Risk index depends on several indicators that include public sector debt as a per cent of GDP; loan to deposit ratio (which measures of banking sector stress); and credit to GDP ratio (which measures credit market stress)Credit market is the broader market through which companies try to raise funds through debt sales. It also includes indicators of external fragility like current account balance to GDP ratio and external debt to GDP ratio among others.

#19 U.S.

Credit to GDP ratio: 5.1%

Loan deposit ratio: 147%

Public sector debt as a per cent of GDP: 92.7%

Total score: 4.8

Source: UBS

#18 Poland

Credit to GDP ratio: 24.6%

Loan deposit ratio: 106.3%

Public sector debt as a per cent of GDP: 54.2%

Total score: 4.8

Source: UBS

#17 Romania

Credit to GDP ratio: 21.2%

Loan deposit ratio: 113.3%

Public sector debt as a per cent of GDP: 35.3%

Total score: 5.1

Source: UBS

#16 Norway

Credit to GDP ratio: 24.8%

Loan deposit ratio: 214.9%

Public sector debt as a per cent of GDP: 54.3%

Total score: 5.1

Source: UBS

#15 Canada

Credit to GDP ratio: 23.4%

Loan deposit ratio: 199.3%

Public sector debt as a per cent of GDP: 81.7%

Total score: 5.1

Source: UBS

#14 Italy

Credit to GDP ratio: 25.3%

Loan deposit ratio: 165.2%

Public sector debt as a per cent of GDP: 118.4%

Total score: 5.2

Source: UBS

#13 Finland

Credit to GDP ratio: 19.9%

Loan deposit ratio: 156.4%

Public sector debt as a per cent of GDP: 50%

Total score: 5.3

Source: UBS

#12 Bulgaria

Credit to GDP ratio: 36%

Loan deposit ratio: 102.6%

Public sector debt as a per cent of GDP: 16.6%

Total score: 5.3

Source: UBS

#11 Netherlands

Credit to GDP ratio: 15.7%

Loan deposit ratio: 158.7%

Public sector debt as a per cent of GDP: 66%

Total score: 5.4

Source: UBS

#10 Sweden

Credit to GDP ratio: 27.3%

Loan deposit ratio: 237.6%

Public sector debt as a per cent of GDP: 41.7%

Total score:

Source: UBS

#9 Belgium

Credit to GDP ratio: 22%

Loan deposit ratio: 98.1%

Public sector debt as a per cent of GDP: 100.2%

Total score: 5.5

Source: UBS

#8 France

Credit to GDP ratio: 19.4%

Loan deposit ratio: 163.6%

Public sector debt as a per cent of GDP: 84.2%

Total score: 5.5

Source: UBS

#7 Denmark

Credit to GDP ratio: 44.1%

Loan deposit ratio: 346.1%

Public sector debt as a per cent of GDP: 44.2%

Total score: 5.6

Source: UBS

#6 Hungary

Credit to GDP ratio: 21%

Loan deposit ratio: 123.6%

Public sector debt as a per cent of GDP: 85.3%

Total score: 5.8

Source: UBS

#5 UK

Credit to GDP ratio: 35.2%

Loan deposit ratio: 150.5%

Public sector debt as a per cent of GDP: 76.7%

Total score: 6

Source: UBS

#4 Greece

Credit to GDP ratio: 55.7%

Loan deposit ratio: 117.7%

Public sector debt as a per cent of GDP: 130.2%

Total score: 6.1

Source: UBS

#3 Spain

Credit to GDP ratio: 66%

Loan deposit ratio: 223%

Public sector debt as a per cent of GDP: 63.5%

Total score: 6.3

Source: UBS

#2 Portugal

Credit to GDP ratio: 53.6%

Loan deposit ratio: 189.2%

Public sector debt as a per cent of GDP: 83.1%

Total score: 7

Source: UBS

#1 Ireland

Credit to GDP ratio: 56.1%

Loan deposit ratio: 187.3%

Public sector debt as a per cent of GDP: 99.4%

Total score: 7.6

Source: UBS

Now here's who is praying that Italy doesn't default...

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.