Greek Banks Propose Plan to Book Smaller Losses, Euro2day Says

Greece’s banks have proposed a recapitalization plan that would allow them to limit losses arising from Greece’s debt restructuring to 53.5 percent, the size of the nominal cut in value of their government bonds, Euro2day reported, without saying how it got the information.

The plan involves the banks putting new Greek government bonds issued in the exchange into a special-purpose vehicle that would benefit from 8 billion euros ($10.5 billion) of European Financial Stability Facility guarantees, according to the Athens-based news website. The guarantees would divert funds that would otherwise be used to recapitalize the banks directly and allow them to avoid booking losses of 75 percent from the debt swap, Euro2day said.
The plan would need approval from the government, the Bank of Greece (TELL) and the so-called troika of the European Commission, the European Central Bank and the International Monetary Fund, which have yet to agree on the final form of the bank recapitalization, Euro2day reported.
To contact the reporter on this story: Marcus Bensasson in Athens at mbensasson@bloomberg.net