GLG pointed out that the banking turmoil of the late 1920s and early 1930s was followed a few years later by a global debt crisis of almost equal proportions.
“We just had a systematic banking crisis and the share of countries with debt crises is at a 100 year low,” the firm cautioned in a presentation.
GLG’s comments come amid widespread terror that the spiralling debt situation in Greece will spread to other, weaker members of the Eurozone – particularly Portugal and Spain, both of which had their sovereign credit ratings downgraded by Standard & Poor’s in the last week.
The warning comes despite a recovery for Eurozone bond markets yesterday on hopes that the EU and IMF will seal a bailout deal for Greek before the end of the weekend.
Yields on Greek 10-year debt fell a further 91 basis points to 9.03 per cent, while Portuguese ten-year debt yields dropped 39 basis points to 5.43 per cent and Spanish 10-year note yields fell nine points to 4.08 per cent.