|
The latest rescue deal for Greece, concluded by EU finance ministers in the early hours of 21 February 2012, clearly illustrated one thing: banks and other private creditors are not the problem, but part of the solution. Banks are by far the biggest holders of sovereign debt and consequently have to shoulder a lions share of any debt restructuring. According to the new rescue deal, banks will waive 53.5% of their claims vis--vis Greece. And the rest of their Greek bonds will be exchanged for new ones with considerably worse terms. The new rates on these bonds will range from 2% to 4.3% between now and 2046. Effectively the deal will amount to total write-downs of around 75% for banks.
In the profit and loss account of credit...
|