Published: 22:42 GMT, 28 January 2015 | Updated: 22:42 GMT, 28 January 2015

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The Greek banks are back in the frontline as investors and depositors take fright at the shape of the Syriza government.

Three days of selling have seen the bank shares plummet by 40 per cent in a move reminiscent of what happened to banks in Britain and the United States after the collapse of Lehman Brothers in 2008. The survival plan then was recapitalisation on both sides of the Atlantic.

But Greece is not Britain or the United States and the cupboard is bare. It has €6.5billion (£4.9billion) of loan repayments to make in July and August and it is highly unlikely, in present circumstances, that it could access the European Stability Fund, the firewall against problems in one country from spreading to another.

Quest for change: Greece’s new prime minister Alexis Tsipras says he wants to re-structure the country’s colossal debts

The surge in Greek bond yields to more than 10 per cent suggests that the markets do feel that Greece will have no alternative but to renegotiate its debt and seek some kind of moratorium.

The danger to the troika of allowing that to happen is the worry that other indebted countries — Portugal, Spain et al — will see it as an excuse to do the same.

One perception that needs correcting is that somehow debt default is something terrible and should be avoided at all costs. It depends on how it is done.

If it is carried out with goodwill, as was the case when the allies forgave large chunks of German debt in 1953, it can be delivered without disturbing access to global markets.

A similar organised debt restructuring took place in Latin America in the 1980s when the United States enthusiastically took part because of fears that failure to do so could destroy Citibank and other US financial institutions. Britain’s Lloyds, then a big player in Latin America, also took a big hit.

What is much more unpredictable is a unilateral default of the kind which Syriza discussed during the recent election campaign.

Here the portents are not so positive.

The 1998 default by Russia on some of its debts sent shockwaves through the financial system contributing to the collapse of the hedge fund Long Term Capital Management and losses at Barclays. More recently Argentina reneged on its debt and has found itself a global pariah.

Change is ahead: ‘Compromise with some kind of Greek restructuring must be the answer’, says Alex Brummer

If Greece were to get some kind of restructuring, would other EU countries seek to do the same? Probably not. Even the hint that they might do so would see bond yields surge to levels at which debt could never be repaid.

Moreover, after last week’s quantitative easing announcement by the European Central Bank, the countries opting for a radical restructuring of debt would almost certainly be cut off from the right to create new credit and the chance to re-float their economies.

The domino theory is understandable but one doesn’t have to buy into it. At present both sides in the Greek debt dispute — the troika of the EU, the ECB and the International Monetary Fund on the one side and Syriza on the other — are staking out tough positions.

But with the markets in turmoil, the IMF — after all, one of the guardians of stability — will not want to be seen as the architect of a new era of mayhem.

Compromise with some kind of Greek restructuring must be the answer.

Land grab

It was inevitable that Qatar (with Canadian backing) would eventually end up in control of Canary Wharf. It has deeper pockets than most, is enthusiastic about London real estate and was armed with a 28.6 per cent stake in quoted parent Songbird.

It adds Canary Wharf to a rich assortment of London property that includes sites as varied as the American Embassy in Grosvenor Square (on its way to Battersea), the HSBC tower and upmarket residential developments including the Chelsea Barracks.

As far as Britain’s biggest developers are concerned, the foreign buyers pouring into London are heaven sent and have comfortably restored their finances after the battering commercial property took in the great recession.

Land grab: Qatar won a bid to buy London’s Canary Wharf for £2.6 billion

Qatar recently has shown some signs of cleaning up its act globally, expelling Hamas and the Muslim Brotherhood from Doha amid concerns that strategic allies were becoming impatient with arms-length support of Jihadi movements.

Qatar tends to be a passive investor as has been seen at J Sainsbury and the London Stock Exchange.

What should also be remembered, as Libya, Iran and other rogue states learned to their cost, is that if there ever were a national security threat the UK has the powers to freeze assets.

In the past it has not hesitated to use them.

Playing the field

Would Antonio Horta-Osorio, the chief executive of Lloyds Banking Group, make a suitable replacement for the unpopular Peter Sands at Standard Chartered?

It doesn’t look like a match made in heaven.

Would Antonio Horta-Osorio (pictured), the chief executive of Lloyds Banking Group, make a suitable replacement for the unpopular Peter Sands at Standard Chartered?

Horta-Osorio is a European retail banker who has had considerable success at Santander UK and Lloyds.

Standard Chartered is much more of a commercial and investment banking outfit in Asia although it does have strong retail franchises in Hong Kong and Africa.

But they are dwarfed by what Lloyds has in Britain. One suspects the smooth Portuguese will stay where he is. But it is always useful to have a bargaining chip.

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