Grexit fallout could challenge ECB: Moody's

While the euro zone could recover quickly if Greek left the single currency area, the impact on investor confidence could be far-reaching, the managing director of sovereign risk at Moody's Investors Service, told CNBC on Friday.

"We think the immediate impact would be relatively slight, Greece is a very small part of the euro zone economy, trade with Greece is a very small of overall euro zone trade," Alastair Wilson told CNBC.

"What is more difficult to predict is the impact on confidence in financial markets and therefore the potential implications for euro zone debt markets, which of course are the dynamics we saw at the height of the crisis in 2011-2012."

The exit of a member from the 19-country single currency union would "inevitably" hit investor and consumer confidence, Wilson said, although Moody's would expect a "relatively transitory impact and for the euro zone's economy to recover."

"The impact of a member of the currency union leaving the currency union is bound to have an impact on the confidence of investors who need to be able to allow governments to roll over very significant amounts of debt every year," he told CNBC.

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The reaction of financial markets to a Grexit—the term coined to describe the risk of Greece exiting the euro zone--was more difficult to predict, Wilson said, as was the ability of the European Central Bank (ECB) to contain the risk of contagion.

Read MoreGreek crisis: A step closer to aid deal?

"Most likely, the tools that the authorities, and particularly the ECB have, would be significant enough to contain the contagion, but they might not," he told CNBC.

Talks continue

So far, officials in institutions such as the ECB have refused to countenance that Greece could soon go bankrupt, default on its debt repayments or crash out of the euro zone, due to concerns that this could set a precedent for other struggling euro zone countries.

Greece has not made things easy for itself, however, with its new far-left government disputing reform measures that its lenders demand as part of its 240 billion euro ($269 billion) bailout program.

On Wednesday, Moody's downgraded Greece by one notch to Caa2, citing uncertainty over whether Athens would reach an agreement with its bailout supervisors.

Talks have continued this week between Greece and the so-called Brussels Group of bodies overseeing its bailout—the International Monetary Fund (IMF), ECB and European officials—and are hoped to conclude Sunday.

Greece's lenders have said they will not release a last tranche of aid, worth 7.2 billion euros, until Greece makes far reaching reforms, however.

Greece is running out of money, with loan repayments to the IMF due in the next few weeks. The country is struggling to pay domestic wages and pensions, with pensioners queuing outside Athenian banks on Thursday as their payments were delayed due to what the government called a "technical glitch."

Read MoreGreece reforms still lack substance: Official

On Friday, Wilson said that Moody's didn't think a Greece crisis would precipitate a "Lehman's" moment in Europe (102604629), referring to the bankruptcy of U.S. financial firm Lehman Brothers. It is widely thought to mark the start of the global financial crisis in 2008, which preceded the multi-year euro zone debt crisis.

"We think that the euro zone economy, its financial system and the authorities and their capacity to respond is in a very different place to where it was in 2012, so it should not be Lehman moment— but it could be," Wilson told CNBC.

Greek Prime Minister Alexis Tsipras has expressed optimism that a deal with lenders can be reached before a crucial Eurogroup meeting of euro zone finance ministers on May 11. However, a euro zone official told CNBC on Wednesday that a lot of work still needed to be done on the "substance" of reforms that Greece was proposing, before it could receive aid.

- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld