(Reuters) – A Greek exit from the euro zone could expose the European Central Bank and the currency bloc it seeks to protect to hundreds of billions of euros in losses, landing Germany and its partners with a crippling bill…

…With most of Greek’s private creditors having taken heavy writedowns as part of the country’s second, 130 billion euros bailout, it is estimated that the ECB, International Monetary Fund and euro zone nations hold approaching 200 billion of its debt.

“In the event of an exit, they (Greece) will default. And the loss given default will probably be very high, high enough to eliminate the ECB’s capital,” said Andrew Bosomworth, senior portfolio manager at asset manager Pimco.

“They might need recapitalisation from governments, who are not exactly in the best position to provide additional capital.”

Those are not the only losses the ECB and its national shareholders might face…

via Insight – Greek exit could cost euro zone 100s of billions of euros | Reuters.

May 14 (Reuters) – …while it may have become commonplace to discuss a Greek exit (or Grexit as many economists call it), the practicalities and implications of it are far more complicated and daunting than many outside observers acknowledge.

It’s not even clear Greece can leave the common currency. The EU’s Lisbon Treaty doesn’t make any such provision – it only considers a country leaving the European Union. And in theory a country can’t be forced out of the bloc – it has to decide of its own accord whether it wants to stay.

Yet even that is not entirely set in stone. Asked whether it was legally possible under the EU treaties to force Greece out of the 27-country union, one euro zone diplomat replied:

“In theory it’s not, but it’s a bit like the drummer in the band – if the band doesn’t like the drummer, there are ways of getting rid of the drummer.”

via Greece, euro exit and the drummer in the band | Reuters.