Eurozone banking - prepare for the Big One!

In 2005 I warned in another blog that to keep one's money in Italian government bonds that yielded a paltry 10 basis points more than German Bunds was not sensible. Now that a certain sense of normality has returned to financial markets in the Eurozone it is easy to forget the major risk that still exists when the next Euro-Quake hits the headlines. Investors have a short memory - only two months ago depositors in Cypriot banks were unilaterally stripped of (part) of their wealth. So I would urge any reader to consider transferring his bank deposits into Eurozone countries that can be considered 'safe' (hopefully there are some that deserve that description). Interest paid on deposits is ludicrously low in all countries so there is very little loss if money is moved out of vulnerable countries and their banks. But the upside is substantial as any break-up of the Eurozone would lead to major losses in the currencies of the countries that are forced out. So depositors are basically getting a free option.