The eurozone does not know how to manage a sovereign default event and it could lead to a chain reaction, according to the likely next ECB President Mario Draghi.Draghi, speaking now, says that in the event of a sovereign default, credit default swaps could be tripped and create a chain reaction. He says, “We don’t want a repeat,” of what happened with Lehman Brothers, according to Bloomberg.
Draghi is under pressure this morning ahead of his confirmation as next ECB President. He’s defending himself against accusations he had something to do with the Goldman Sachs-Greek deal, and his Italian heritage saying, “I’m Italian, I guess.”
Draghi’s candidacy was previously in question because of his links to Goldman Sachs, the aforementioned Greek deal, and his Italian heritage, a country associated with high inflation in Europe.
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