As news broke that Greek Credit Default Swaps (the cost of insuring international debt against default) have risen sharply, the international press quickly found out that it had risen above Iceland’s CDS level and turned it into a global “wow” story.
The fact that Greek CDS levels went higher than Iceland’s yesterday actually has no real significance and Icelandic politicians and bankers have not been stupid enough to suggest that this has happened because of anything Iceland has done right: the difference is far more about Greek numbers rising than it is about Iceland falling.
However, the fact that Greece has not topped Iceland’s CDS levels in five years and the fact that a slightly reduced Icelandic CDS has at least contributed to the “wow” event is slightly heartening for those at the top.
As Greek banks are forced to request more assistance as the cost of insuring debt continues to rocket, Iceland’s already-decimated banks are having an ever-so-slightly easier time. But all things are relative, of course.
By Alex Elliott, IceNews editor