FRANKFURT, Germany (AP) — Europe's new risk monitor is warning that the eurozone's debt crisis could spread financial harm beyond Europe.
The European Systemic Risk Board said Wednesday that the vulnerabilities of government finances in several countries could have "potential contagion effects across the Union and beyond."
Banks are exposed to government bonds, while losses could also spread through derivatives such as credit default swaps.
The eurozone countries have already bailed out Greece, Portugal and Ireland and are struggling to come up with yet more help for Greece to prevent a default next month.
The board also warned that governments must be ready to make banks strengthen their finances after stress tests. The results are due next month.
