29 May 2015
The Greek debt crisis has once again raised the possibility of Greece leaving the euro area (whether as a result of a Greek sovereign debt default or otherwise) as the escalating stand-off between Greece and the euro area, ECB and IMF shows little indication of dissipating. The analysis of implications of a so called "Grexit" under market standard loan documentation remains much as we outlined in 2011. However, concerns evolve over time and although probably the most extreme, a full Grexit is now just one of several potential scenarios. In light of regulatory requests to update contingency planning, this briefing republishes and updates our answers to key questions concerning a potential Grexit and touches on the implications of the more intermediate possibilities of sovereign default and imposition of capital controls.