U.S. banks not worried about Greece - yet

NEW YORK (CNNMoney.com) -- The debt crisis in Greece is unlikely to have an immediate impact on U.S. banks, analysts said Thursday, but contagion to the rest of Europe could prove problematic.

U.S. banks have about $176 billion of exposure to the troubled so-called PIIGS countries - Portugal, Ireland, Italy, Greece and Spain - according to a recent report from Barclays Capital, citing data from the Federal Financial Institutions Examinations Council.

That amount, the majority of which is held by 10 top U.S. banks, represents 5% of the industry's total international exposure, according to analysts Jonathan Glionna and Miguel Crivelli, the authors of the report.

Some analysts say that this is a relatively low exposure, and that should give investors confidence that U.S. banks are safe.

"Generally speaking, any direct exposure [to those nations] is very manageable and modest at best in the total scheme of the large diversified U.S. banks," said Joe Scott, a bank analyst at Fitch Ratings.

But investors are still nervous. In recent weeks, they've increased purchases of credit default protection, a type of insurance against financial loss, in U.S. banks. Analysts said investors aren't completely sure how much exposure to European issues the banks have as the crisis unfolds.

"Banks are fundamentally opaque institutions. You can look at their balance sheets, but you don't know what loans they hold," said James Angel, associate professor of finance at Georgetown University in Washington.

The "follow-on" effects of the Greek crisis, he said, could include shocks to banks' profitability and credit quality. The most material impact could come in the form of a severe deterioration in business loan quality, as companies with European exposure see a slowdown in activity that results in an inability to repay debts.

"The problem with contagion is that you don't know where it ends," said Anton Schutz, president of Mendon Capital Advisors. "An outbreak is an outbreak, and there's no telling if it'll affect one, two, or everybody."

Still, any problem in U.S. banks is unlikely to surface for some time, because it is difficult to obtain information on cross-border risk from individual banks. That information is rarely, if ever, mentioned in Securities and Exchange Commission reports, said Glionna and Crivelli.

This could underline how little risk there is, since the SEC requires banks to disclose foreign loan exposure that exceeds 0.75% of assets or 15% of capital.

But large hedge funds, which have a higher appetite for risk, could be more exposed to Greek and other European securities, said Angel. He said that any banks with ties to those hedge funds could face problems.

"Someone's overexposed, but we don't know who yet. That's where the fear is coming from," said Angel. "We won't find out who's swimming naked until a big default occurs."