Cost of debt default insurance may rise

London: The cost of insuring against US and British debt defaults may rise in the same way as it has for so-called European peripheral nations including Greece and Portugal, Deutsche Bank AG said.

“The problems currently faced by peripheral Europe could be a dress rehearsal for what the US and UK may face further down the road,” Jim Reid, a strategist at Deutsche Bank in London, wrote in a research note.

“These countries have similar issues to those facing peripheral Europe but have the luxury of a flexible currency up their sleeves as a first defence if the market wants to attack them,” Reid said. “Such a defence means that the market, for now, thinks there are easier targets.”