BNP Pariabas,  Europe’s largest bank in terms of total assets,  took a €2.1 billion hit to earnings after increasing reserves on its Greece exposure to 60 percent,  up from 21 percent last quarter.  The European banks are finally getting serious, though if Greece leaves the Euro, 60% will fall far short of the ultimate recovery value — less than 40 cents — for the sovereign’s  euro denominated bonds.

This is going to put pressure on other European banks to reserve or effectively write down their Greece exposure to 40 cents.    Buckle up.

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