M&G's Riddell: Ten reasons why the EFSF is not the Holy Grail

OUR EFSF CONCERNS

We've had numerous concerns with the EFSF ever since it was announced last year. Here's our top 10, in no particular order.

1. The considerable risk of one or more of the AAA rated guarantors being downgraded, which would threaten the EFSF's AAA rating. 2. The fact that the EFSF's current size and form aren't sufficient to bail out Spain and Italy. 3. A larger EFSF, which solves point 2, could weigh on sovereign ratings and result in problem 1. 4. Legal risk. Investors in EFSF bonds have no understanding of what the money is to be used for (initially investors were told the facility was not to be used for bank bailouts but that looks likely to change). And if an EFSF guarantor reneges on its guarantee t...