This piece published today by Project Syndicate is as insightful a critique as I've seen of the consensus that has emerged among policymakers that government deficits must be cut to restore economic growth.

Not that we haven't taken a stab at that ourselves.

Fearing the fallout should a member-country leave the euro, the International Swaps and Derivatives Association (ISDA) is putting together a committee to study the impact--after a number of requests from members. And according to the FT, a number of banks have begun prepping for such a contingency, as well.

Concerns have grown that a member might be forcibly ejected from the eurozone in light of conflicting eurozone-wide views on implementation of fiscal and monetary reforms necessary to bring member-states out of the growing sovereign debt crisis that is threatening the region.

Corporate banking professionals are less pessimistic about Greece's financial condition than investors are, according to surveys by Bloomberg and by our editorial partner, the Benche, a website sponsored by the Swedish bank, SEB.

According to the Benche, half of its registered members, who work primarily in corporate banking, say Greece will fail to make timely payments of interest and principal on its debt.

The ECB and IMF stabilization package and austerity measures now being enacted in certain eurozone countries have brought into question what the longer-term repercussions could be of a single focus on debt reduction – without a complementary focus on building growth.

Alessandro Profumo, CEO of European banking giant Unicredit and president of the European Banking Federation, brought up this very question in a piece in today’s FT. Said Profumo: “The issue for me is that this significant public debt can be repaid only with more growth. And in order to have more growth, I think we cannot do it with debt. I think we need more reforms and, for instance, more Europe, an integrated internal market.” Without a bifurcated response the risk is that growth will be much slower in coming, which will continue to depress Eurozone economies – and having a knock-on effect on global economies - for some time to come.

Although dollar Libor rates have not hit the peak seen during the crisis in 2008, the three-month rate is now at the highest level since last August – at 0.421 percent on Monday - and the Libor Overnight Indexed Swap (OIS) spread, which gauges banks’ willingness to lend to other banks, is also at its widest since last August – at 19.2 basis points on Monday.

The rise shows that banks and institutional investors are becoming more risk-averse as fears rise over growing European deficits. Investors are wary of buying banks’ commercial paper, and both banks and institutional investors are looking for safe haven longer-term investments to wait on the outcome of ECB and EU stabilization measures.