Risk managers search for eurozone defences

Following Ireland’s bail-out in November, bank risk managers accept the eurozone crisis is here to stay and are trying to guard against the worst. Some are looking for practical responses, others for smart hedges – but nobody is finding it easy. Duncan Wood reports

After Europe agreed a €750 billion support package for eurozone countries in May, there was a period when it was possible to imagine the gambit had worked – that it had restored investor confidence and bought time for peripheral countries to get back on their feet. It was nice while it lasted, but Ireland’s bail-out in November changed the mood completely.

Now, risk managers are getting used to the idea of a crisis that will rumble on – dormant for months then bursting into life when sovereign