Plan to bail out Greece takes shape
International banks and insurers will thrash out improvements to a plan for the private-sector to contribute to Greece's bailout effort at a meeting in Paris today in a bid to prevent the proposal from coming unstuck.
The Institute of International Finance lobby group said it would chair the meeting of private sector creditors and officials.
The institute on Friday said banks supported proposals to help Greece and were considering a small number of options. Creditors are now trying to hammer out the plan's details.
A number of banks held an informal discussion in Paris yesterday to resolve the issues.
French banks, major holders of Greek sovereign debt, have proposed voluntarily renewing Greek bonds when they become due, but on different terms, which could trigger a default.
Obtaining clarity on the accounting treatment of France's plan remains a key issue.
Politicians and bankers had expressed confidence last week that the French proposal would not trigger a default, but rating agency Standard & Poor's on Monday said it would involve losses to debt holders, most likely earning Greece a "selective default" rating.
Under France's plan, bondholders will reinvest at least 70% of the proceeds from bonds maturing between now and the end of 2014 in new 30-year Greek debt.
The lobby group - which represents insurers and other financial firms as well as banks, including BNP Paribas, Deutsche Bank, HSBC and Societe Generale - is playing an informal role of co-ordinating international banks to reach consensus on private-sector involvement in a bailout of debt-ridden Greece.
Today's meeting will be chaired by Charles Dallara, the institute's managing director. It is one of a series of meetings the organisation is co-ordinating, running in tandem with technical discussions held since its meeting in Rome, Italy, a week ago.