The best ways to play Europe’s banking crisis

As smart investors flee the Continent for safer markets, where should you be putting your money now? James Ferguson looks at the likely effects of a default, and picks the best stocks to tuck away.

This article was originally published in MoneyWeek magazine issue number 562 on 4 November 2011, and was available exclusively to magazine subscribers. To read all our subscriber-only articles right away, sign up for a three-week free trial now .

Having finally agreed a deal on a second Greek bail-out last week, European politicians were rewarded with a short but sharp stockmarket rally. This week, the Greek prime minister, George Papandreou, brought everyone back down to earth by calling for a referendum on the terms of the deal. Greeks are already rioting over the austerity measures imposed under the terms of the first bail-out, so any referendum would be likely to come out against the deal, which amounts to €130bn for Greece, including a 50% haircut' on Greek national debt.

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James Ferguson qualified with an MA (Hons) in economics from Edinburgh University in 1985. For the last 21 years he has had a high-powered career in institutional stock broking, specialising in equities, working for Nomura, Robert Fleming, SBC Warburg, Dresdner Kleinwort Wasserstein and Mitsubishi Securities.