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Dubai Debt Fiasco Could Weigh on U.S. Banks

A potential default by Dubai on debt payments could have a ripple effect on U.S. banks and the still-gloomy commercial real estate industry, some analysts say.

Citigroup Inc. (NYSE: C) has $1.9 billion invested in the nation's state-owned investment vehicle Dubai World, JPMorgan Chase & Co. (NYSE: JPM) said in a research note.

While not directly affecting Citi or other major U.S. banks, the indirect effects could be more crippling on a broader scale, Rochdale Securities analyst Dick Bove told CNNMoney.

"There could be huge indirect exposure," Bove said. "One has to assume that U.S. banks will be hurt."

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