Reply #9: Bankers in bid to reach deal on role in Greek bailout [View All]

http://www.irishtimes.com/newspaper/finance/2011/0706/1224300156698.html

SENIOR GLOBAL banking executives will gather in Paris this morning in a fresh attempt to broker a deal on private creditor participation in the next phase of the Greek bailout.

The meeting, in the headquarters of BNP Paribas, comes against the backdrop of an assessment by Standard Poor’s that a French initiative to extend the maturity of some Greek debt by as much as 30 years would result in a debt default. Germany, the Netherlands and Finland are insisting that private investors bear costs in a second international bailout of Greece, but the issues are technically complex and sensitive for banks as they are reluctant to trigger upfront losses on their investments.

German chancellor Angela Merkel said yesterday that euro-zone governments should not give credit-rating agencies the exclusive power to determine creditworthiness. But SP’s intervention is seen as a big setback in diplomatic circles as the French proposal was considered a plausible precedent for other countries to follow.

The Paris meeting will be organised by the Institute of International Finance (IIF), a global banking lobby, and will chaired by its managing director, Charles Dallara.