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UBS Gets Its Bible On

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"Lend not unto him that is mightier than thyself; for if thou lendest him, count it but lost."

UBS AG cites this passage from Ecclesiasticus 8:12 in a look at sovereign debt defaults, bank crises and bond restructurings dating back to ancient Greece. The point of the report, done by emerging markets analyst Costa Vayenas at UBS in Zurich, is to discuss the lessons from defaults of the past, and what investors might learn...UBS cites a well-documented case from 377 BC to 373 BC to illustrate how the ancient Greeks learned that sovereign defaults occur in clusters. In that case, 11 of 13 states defaulted on loans from the Temple of Delos, not exactly the equivalent of the Fed but the lender of last resort nonetheless. Some 90 per cent of the money had to be written off, UBS notes. [Globe And Mail]


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