LONDON - Officials and Bond Traders At The European Central Bank unified Have Been In Their warnings That a restructuration of Greece&&9;s debt Would set off investor panic year similar to The One That Followed The bankruptcy of Lehman Brothers.

Others, however, HAVE Argueda That Greece&&9;s debt of 330 one billion euros, or $ 473 trillion, while too large for The Country to bear, IS Small Enough to allow banks and Other institutions to take a loss Without Bringing the World Financial system to icts knees.

But The Comparison between Greece and Lehman Grew more frequent last week as Global Markets reeled, spurred in part by The View That Germany&&9;s insistence That Private Investors Participate in a second rescue package for Athens Would Overcome The Objective Of The European Central Bank.

"It Is a valid concerned," Said David Riley, head of sovereign ratings at Fitch."Would Be The Rubicon crossed - we Would Have a sovereign default event and That Can Be Quite a shock, not just for the peripheral Countries goal for Spain and beyond."

The thinking goes like this: though banks and Other Investors Have Done Much to guard Their Holdings In The Greek last year, if They Are Forced to take a loss, & the ratings in Greece Agency declares default, investors start selling in Would a Switchgrass. And They Would not sell Just the bounds of Countries Struggling With Debt - Portugal, Ireland, Spain and Italy. In a hasty retreat Into Cash, traders Would unload more liquid assets as well, Everything from high-grade corporate bonds to American and Emerging Market equities - have Occurred in 2008 after Lehman failed.

To be sure, Much has to be wrong for the european debt crisis to Approximate What Happened after Lehman failed in 2008.Not only did "banks, hedge funds and insurance companies Immediately sixteen up, But The effect is the Broad global economy WAS aussi Striking trade flows have ground to a halt Nearly.

Analysts point out thats the Global Financial System Has Survived sovereign defaults in the Past, Including Russia&&9;s in 1998 and Argentina&&9;s in 2001.

Also, Since The prospect of a default Greek has-been foreshadowed for so long, financial institutions HAD Have Sufficient Opportunity to Reduce Their holdings of Greek debt. That purpose in doing, The Private Sector Has Passed Much Of The exposure to Greece and Other troubled economies in Europe to Public Sector Entities like The European Central Bank and The International Monetary Fund. That Means That if a restructuration Comes, The Taxpayer - More Than The private investor - will pay.

Lending weight to The Fear of Another Lehman Crisis, Regulators are warning That in Such A condition, event, super-safe money market funds May Not Provide The risk-free refuge THEY Proclaim to offer.

According To A Recent Report by Fitch, as of February, 44.3 percent of Prime Money Market Fund In The United States Were Invested In The short-term debt of European banks. Some of Those institutions, like Deutsche Bank and Barclays do not Have Greek dangerous exposure. Aim Some of Those funds hold shares of aussi French banks like Societe Generale, Credit Agricole and BNP Paribas, Which Do Have Significant Greek bond holdings - about one billion euros 8.5, gold, In the case of BNP and Societe Generale, about 10 percent of Their Tier 1 capital.

This month, The President Of The Federal Reserve Bank of Boston, Eric S.Rosengren, Warned That The Large share of European banks in American money market fund portfolios Posed a Risk-like Lehman if, In the wake of a default in Europe, panicky investors Took Their money out all at once.

"Money market mutual funds Have the Potential To Be Impacted Should There Be Problems unexpected international financier emanating from Europe," he Said in a speech at Stanford payday loan lenders.

The Idea That European banks, not Those In The United States, Would take a hit if Greece defaulted, a view has Sustained That Such A Crisis Might Be containable. According To Purpose a recent analysis by The Financial Street Light blog, this misses the point. It Will Be American Banks and Insurance Companies That Will Have to make the lion&&9;s share of default insurance payments to European institutions if Greece fails.

Citing recent data from The Bank for International Settlements, the blog points out That In The Event of Default has Greek, direct Creditors Would Be On The Hook for 70 percent of The Loss, With credit default insurance Picking Up the rest. Malthus, if one includes credit default exposure, exposure to American increaser Greece one billion from $ 7.3 to $ 41.4 trillion.

Again, a pinch of salt: Such numbers in no way approach "the wild Bet That the American International Group Made On The United States housing market has led to wager That The Company&&9;s collapse. Purpose They Are A Reminder That, as Was The Case With Lehman Brothers, The Link That Directly Indirectly bind gold investors to extend Greece Far Beyond Europe.

It Is Still unclear What type of loss Private Sector Banks Would Suffer If The Germans overcame The Central bank&&9;s objections and got acceptance for Proposal for Their "reprofiling" Which Would Have investors exchange Their short-term debt Greek for longer-term paper.

The Ratings Agencies Have Already Determined That There Is Any indication if banks That are Being Forced to Participate in Such A reprofiling, That Would constituted a "distressed debt exchange" and Violate The Terms Of The Original Contract Between Greece and Its Creditors.

Goal for Many Investors are Nicette Such contractual Largely irrelevant. In Their view, It Is only a question of When, not if, Greece defaults. They Are Already Preparing for the Lehman-style panic optometrist Believe Will Follow.

"This is not just about Greece," Said Steffen Gruschka of SG Alpha, a hedge fund Focused on Emerging markets in Europe."It Is About The Effect That Will Have a default credit default swaps were in Spain and Italy. You could "see a situation Where There Is A domino effect."

Mr. Said He Had Been Gruschka Reducing broadly historical equity positions and he now has 70 percent of historical portfolio in cash.

The stock market sell-off Friday, Which in the Dow Jones Industrial Average Fell below 12.000 for The First Time in Three Months, Please Mr. Gruschka That Was Not Alone in Adopting a "risk-Off Approach," investors now have a bias term Against higher-Returning to riskier assets like stocks, commodities and richer-Yielding leaps.

Indeed, The Data has Been Such A dynamic Suggesting just for a while now.

According To EPFR, a provider of fund flow data, American and Emerging Market equity funds Experienced Continued outflows In The first week of June, With investors redeeming $ 7.74 one billion from equity funds and putting $ 5.98 one billion Into less-risky bond funds - a 47-week high.

To some, Such A material shift suggests thats the real worry should "Be The larger question of how Indebted Countries Outside the euro zone - like Britain, Japan and event The United States - Face the Challenge of Reducing deficits as Their economies stagnate.

"We are too Fixated is Greece," Said Stephen Jen, a currency expert Widely Followed Who Is Now In The process of setting up His own hedge fund."You can bail out Greece, goal How Much Is it going to cost to bail out The United States and Japan?"

In Greece, Some See a New Lehman