Last year, markets feared that west European banks – including several from Greece – could suffer from their heavy exposure to central and eastern Europe. That has since been turned on its head. Now there are concerns that Greece's difficulties could, via its banks, cause contagion that might halt the recovery in south-east Europe.

Greece's big four banks spent the past decade expanding into Romania, the Balkans – above all Bulgaria – and Turkey. By last September, on Bank for International Settlements figures, Greek banks had about a $60bn loan exposure to emerging Europe. Now the worry is that Greece's fiscal problems could lead to a liquidity squeeze, prompting its banks to withdraw liquidity from abroad. The International Monetary Fund warned last summer that Greek banks' foreign subsidiaries had far higher loan-to-deposit ratios than in Greece itself, having relied heavily on parents' funding. So south-east Europe could face difficulties if Greek banks constrained their parental support.

Greek banks' lending in Turkey, at $20.6bn, looks significant, but accounts for only 5 per cent of the market, limiting the risks. Elsewhere, an important mitigating factor, notes Royal Bank of Scotland, is that the region's banking sectors remain small, making bank recapitalisation costs potentially manageable. Greek banks' $19.1bn loans to Romania account for about 16 per cent of that market by assets. But Romania already has an IMF lending programme that might help it ride out any Greek spillover.