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Fallout can be reduced: Rajan

business Updated: Jun 15, 2011 22:30 IST
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The fallout from a Greek debt default can be contained if European leaders reached an agreement to let the restructuring take place in an orderly manner, former IMF chief economist Raghuram Rajan said on Wednesday.

“One of the advantages of this long drawn-out crisis resolution process is that many private sector entities that were exposed to Greece have reduced their exposure,” Rajan said. “The extent to which banks in Europe are exposed to Greece is much more limited than it was a year ago, and so the cost of a Greek default and restructuring could be absorbed by the banking sector.”