How big a problem is it? Oh, not too bad - just $4 trillion worth of exposure to euro debt, credit default swaps (you remember those, don't you?), and indirect exposure through european big banks. And there are individual banks worse off than others. Reuters: Officials were stung by the implosion of Wall Street firm MF Global, which gambled and lost on European debt, and they are working on contingency plans for a worst-case scenario should another financial firm crumble. A senior U.S. Treasury official said regulators are contacting big U.S. financial institutions to make sure they are scaling back exposure to Europe and are ready for a potential worsening of the crisis. The Financial Stability Oversight Council, an inter-agency group set up after the 2007-2009 financial crisis, was trying to identify specific firms that could be hit by financial turbulence and then sort out ways that each one can fortify its balance sheet, the Treasury official said. While the Treasury has been at...(Read Full Post)