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Thursday, November 03, 2011

Sharing Greek debt

Over on his BBC blog Robert Peston cites some of our figures on the shares of Greek debt, so we figured we'd put up our full break down of who owns Greek debt. Given the problems in Greece its interesting to see where the debt is held and who could be exposed to losses in a disorderly default.

So, as expected, the official sectors (ECB, Eurozone and IMF) already own a substantial amount of Greek debt, around €130bn. This only includes current bailout funds dispersed, so will still increase with the completion of the original bailout programme and will skyrocket with the second bailout package. The large chunk held by non-Greek non-banks (essentially private bondholders located outside Greece that aren't banks) demonstrates the difficulty of imposing any significant write downs under a voluntary scheme. These bondholders would never take part in such a scheme, while the official sector loans have been off limits so far. As such the voluntary write downs will fall far short of the advertised 50% when only applied to European banks and some European non-banks.

1 comment:

Anonymous said...

And if the write down is not even "voluntary" in a PR sense, it is a default. That triggers CDA and the "insurers" presumably gain the right to pursue the debtor themselves.

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