Default on debt, leads to collapse of creditor country economies Decrease in debtor's imports, leads to decrease in creditor's exports, ultimately, a decrease in GNP Default on debt leads to collapse of creditor financial systems Chain of defaults – dangerous; large banks left highly exposed; loan loss reserves at only 12% of exposure; failure to collect – lead to decrease in prices and share values; collapse would require FED to provide money to troubled creditor banks Debt Bomb - Exploding
{}