ECB can support European markets; Grexit unlikely, says Credit Suisse Private Banking CIO

EVEN though Greece has formally defaulted on a 1.5 billion euro (S$2.25 billion) debt payment to the International Monetary Fund (IMF), there is still a low probability of Grexit - that the country will exit the eurozone monetary union, said Michael Strobaek, chief investment officer of Credit Suisse Private Banking and Wealth Management.

Meanwhile, the European Central Bank (ECB) can still support European markets by buying the sovereign bonds of peripheral countries and keeping borrowing costs low, Mr Strobaek told The Business Times in an interview on Wednesday afternoon.

"We just last week decided to go long European equities, knowing there's this Greek risk ... we still see a European recovery on the way, we still see the ECB being incredibly accommodative. The euro has become weaker, but Grexit is not necessarily going to derail all of this ... Compared to 2011, today we're in a much different situation," he said.

"Our main scenario is still that we won't see a Grexit. We have a 70 per cent probability that we're going to come through some day, with the Greek population saying we want to stay in the eurozone," he said.