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Rollover: In 60-70% has so far involve individuals
The provisional rate of participation of private investors in the exchange program of the Greek government bond is 60% to 70% with potential for further upside in the coming weeks, said spokesman of the International Financial Institute (Institute of International Finance, IIF) Mr. Frank Vogkl, according to a report by Bloomberg. In a written statement, the representative of the IIF, which coordinates global financial institutions, said it expected to sign it and other banks and insurance companies for their participation in the program. "Many institutions have indicated through their national authorities that will participate in the exchange of bonds, but not authorize the IIF far indicate their names," says the statement, adding that "we expect turnout to increase as it advanced stage in the coming weeks. "
Greek Deputy Prime and Finance Minister Evangelos Venizelos sent a letter last week to the Ministries of Finance 57 countries, including banks and insurance companies hold Greek bonds, which described the exchange program and asked for a response from financial institutions until September 9. The letter states that the program may be canceled if the participation of individuals not reaching the threshold of 90%.
The IIF was announced after the summit of euro zone is decided by the second aid package for Greece, that the proportion of individuals will reach 90%, which means the exchange of bonds totaling 135 billion. million from individuals by 2020. The IIF said that so far having expressly to participate in exchange program for 40 financial institutions that hold bonds worth 70 billion. million or approximately 50% of the total. Mr. Vogkl added that other banks have signed without making announcements, giving a participation rate has reached 60% to 70%.
The amount of damage that will occur in European banks by reducing the value of bonds Eurozone countries is a matter of controversy between the IMF on the one hand and the ECB and eurozone government on the other, according to the newspaper Financial Times.
IMF staff estimates released showing severe damage to balance sheets of European banks, if calculated at the market value of the portfolio in government bonds are Greece, Ireland, Portugal, Spain and Belgium.
According to an estimate of the IMF, says the report, the pricing of bonds under the market price of the share capital (which is the key measure of capital base) of European banks would fall by about 200 billion. million or 10% to 12%.
The assessment was discussed yesterday at the IMF Board in an original text for the report of the Fund for global economic stability, while the
calculation of market values using the prices of insurance premiums against the risk of bankruptcy (credit default swaps). The ECB and eurozone governments emphatically rejected those estimates, arguing that it is partial and misleading, say the Financial Times. Finance Minister Elena Salgado of Spain told the newspaper that the IMF is wrong, considering only the potential damage, but no increases in the prices of German bonds with banks in their portfolios.
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