Risk of euro breakup flagged in draft EFSF documents - reports

A draft prospectus providing details of securities which may be created by the EFSF has acknowledged the breakup of the euro in its list of risk factors.

European leaders have repeatedly insisted a breakup of the single currency is not a possibility. However, clauses included in the draft prospectus created by the European Financial Stability Facility (EFSF) for certain securities warn of this danger. Proposals for Euro Sovereign Credit-Linked Certificates - derivatives which may be used to stretch the resources of the EFSF - are understood to include warnings over the risk of the euro folding, according to the FT. The prospectus for the derivatives highlights the "risks arising from a Reference Sovereign ceasing to use the euro as its...