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tagged: Charles Dallara, default, Greece, Greek Debt swap, haircut, IIF, rollover, selective defaultDallara: Greek Debt Swap Will Likely Cause Selective Default
Posted by keeptalkinggreece in Economy
FRANKFURT (Dow Jones)–An agreement between the Greek government and private bond holders will likely cause a selective default on Greek sovereign debt, the managing director of the Institute of International Finance said Friday.
“We are not worried about a selective default, which will last a matter of days, but won΄t trigger a CDS event,” Charles Dallara, head of the banking industry΄s most important trade group, said on the sidelines of a conference in Frankfurt, pointing to credit default swaps.
Dallara added that he hopes to reach a basic agreement with the Greek government by the end of this year.
Some analysts fear that a debt swap, in which private investors abate some of their Greek sovereign debt holdings, could trigger a credit event or a financial meltdown. The IIF agreed on behalf of bondholders last month to implement a 50% reduction in the nominal value of Greek bonds, via a ΄haircut΄.
The IIF represents the interests of more than 400 financial institutions and has played a key role in negotiating the terms of Greece΄s debt haircut, the exact terms of which are being hammered out by the IIF, bondholders, and Greek officials. (source: Dow Jones, Capital.gr)
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