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Banks 'tightening up risk strategies'

May 30, 2012 - Ongoing uncertainty in the global financial system is causing banks to become increasingly selective over how they conduct their business, experts believe.

At present, it remains unknown how the eurozone debt crisis will pan out as fears over the possible exit of Greece continue to cloud the markets and, with this in mind, financiers are taking a more risk-averse stance to their strategies.

Lenders are primarily concerned regarding their dealings with financiers who are known to be in grave danger of collapsing in the near future, which, in turn, is stifling the ability of those banks to operate while also stifling the region's recovery.

Christopher Wheeler, analyst at Mediobanca, told Reuters: "Banks are particularly wary of counterparties at the moment and no compliance officer is going to take on exposure to a counterparty just because historically they have a strong track record."

Mr Wheeler went on to say that this attitude is likely to become even more extreme should the situation deteriorate further in the near future.

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