The US is no longer lending to Europe but they are still lending their cheap money to everybody else. Europe's banks are currently on a drip feed from the European central bank (see below). So any collapse is not going to happen from a bank failure. Most likely it will happen from social upheaval which will probably start in Greece.
Greenspan: Euro Is 'Breaking Down,' Will Hurt US Stock Prices
Tuesday, 23 August 2011
Former Federal Reserve Chairman Alan Greenspan said fissures in Europe's common currency may lead to slowing in the U.S. economy.
"The euro is breaking down and the process of its breaking down is creating very considerable difficulties in the European banking system," Greenspan said today in Washington.
Emergency steps such as unlimited loans from the European Central Bank are keeping many banks in Greece, Portugal, Italy and Spain solvent and easing lending by other Europe institutions.
Greenspan said a contraction in Europe would hurt profitability and stock values of American companies since Europe is the target market for about 20 percent of U.S. exports and about 20 percent of foreign-affiliate earnings.
