ECB's Bini-don't underestimate impact of Greek default

FRANKFURT: A default for Greece would set a new precedent for a modern advanced economy and would have an impact on countries across the board, European Central Bank executive board member Lorenzo Bini Smaghi said in an interview published on Tuesday.

Asked if it could be assumed the euro zone and its banking system could withstand a Greek default, Bini Smaghi said: "Similar views were held before the Lehman Brothers case. So those who say this (that a default could be withstood) have no idea about how contagion works."