Tornado Alley (PROG)

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UPDATE 1-Ackermann queries Greek hopes for debt swap deal

Related News [2 of 5]

Highlights: EU leaders' comments after summit talks .. Fri, Dec 9 2011
http://www.reuters.com/article/2011/12/09/us-eu-summit-highlights-idUSTRE7B71GD20111209
Anarchist group may have sent letter bomb: German police .. Thu, Dec 8 2011
http://www.reuters.com/article/2011/12/08/us-deutsche-bomb-idUSTRE7B629J20111208

Analysis & Opinion

CDS fight of the day, Seat edition ..
http://blogs.reuters.com/felix-salmon/2011/12/13/cds-fight-of-the-day-seat-edition/
Morgan Stanley housecleaning will please Basel ..
http://blogs.reuters.com/breakingviews/2011/12/14/morgan-stanley-housecleaning-will-please-basel/

Thu Dec 15, 2011 12:55pm EST

By Lefteris Papadimas

Dec 15 (Reuters) - A Greek official voiced optimism on Thursday about a debt swap deal with private bondholders, but Deutsche Bank Chief Executive Josef Ackermann, who also chairs the lobby group representing the investors, gave a more downbeat assessment.

Talks in Athens between representatives of banks and other private investors ended inconclusively on Tuesday but are set to resume by Friday in Paris with the European Union, European Central Bank and International Monetary Fund "troika".

"Our target is to have a final deal with private lenders by the end of the year or in the first days of January 2012," said the Greek official, who spoke on condition of anonymity.

"The mood is very positive, we are optimistic. Each week that passes, we come a step closer to reaching a deal with the private lenders," he told Reuters.

A deal with private investors who hold some 206 billion euros ($268 billion) of Greek bonds is vital to cutting the country's unmanageable public debt, which amounts to around 160 percent of its gross domestic product.

Failure to secure agreement could force a disorderly default which might in turn trigger a wider emergency across the euro zone.

But Ackermann, who chairs the International Institute of Finance, said the talks had run into the ground over demands from Athens that banks accept a "haircut" on their holdings of Greek debt that would come to significantly more than the 50 percent losses originally agreed.

He also expressed doubts about whether a private sector agreement on its own would be enough to provide any lasting relief. "It's just a drop in the ocean," he told reporters in Berlin.

The Greek government of former central banker Lucas Papademos wants to exchange existing bonds held by private investors for a mix of cash and new bonds under an arrangement that would cut the nominal value of their holdings by 50 percent.

Banks are willing to accept a "haircut" but there is disagreement over the actual cost of the package, which the banks say will amount to significantly more than the 50 percent starting point.

Agreement has been held up by wrangling over issues ranging from the credit status and interest coupons on the new bonds to collateral arrangements and legal guarantees to be offered by the official sector.

There are also disagreements over net present value, a measure of the current worth of the bonds' future cash flow, which could significantly change the overall size of the ultimate agreement.

On Tuesday, IIF managing director Charles Dallara said "much further effort" would be required to reach an agreement.

The banks have lined up law firms Allen & Overy and White & Case and advisory firm Blackstone to help with negotiations over the debt restructuring, sources close to the talks have told Reuters.

Even if a deal is reached, there may be doubts over its implementation, with questions
remaining over how many banks will accept the terms of whatever offer is finally agreed.
http://www.reuters.com/article/2011/12/15/greece-idUSL6E7NF2KH20111215

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Ackermann Says Investors Need Security to Buy Sovereign Debt
December 15, 2011 2:23 PM text size: TT

Dec. 15 (Bloomberg) -- European leaders' demands that creditors take losses on Greek sovereign debt as part of a rescue for the country increased investor uncertainty around the globe and it is “very important” that this private sector involvement is ruled out for other euro area countries, Josef Ackermann, chief executive officer of Deutsche Bank AG, said.

Banks and insurers will buy sovereign debt if the so-called PSI is
taken out of the equation, he said today on a panel discussion in Berlin.
no more .. http://news.businessweek.com/article.asp?documentKey=1376-LW91AI6JTSEC01-4C73R684HFU5LB0EL1UFAR9955

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EXECUTIVE PROFILE* Josef Ackermann ..
http://investing.businessweek.com/research/stocks/people/person.asp?personId=1540899&ticker=DB:US

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At last, more transparency in Europe's banks

Jun 17th 2010, 18:12 by Charlemagne

IT IS buried in article 14 of an uninspiring set of summit conclusions, but the 27 leaders of the European Union took a useful and important decision today, namely to publish the results of stress tests on Europe’s 25 largest banks.

[...]

The Germans were more reticent, with the boss of Deutsche Bank, Josef Ackermann, saying last week that he supported publication of stress tests in principle, but that going public would be “very, very dangerous” if mechanisms to support European banks were not in place beforehand. Unsurprisingly, Germany’s public sector banking association, is still opposed: it represents the regionally-owned Landesbanken where many of Germany’s scariest financial skeletons lurk.

The Spanish forced the pace, however. Officials here in Brussels say that only two Spanish banking groups, Santander and BBVA, are big enough to make the 25 covered by the summit conclusions.

But the governor of the Bank of Spain, Miguel Ángel Fernández Ordóñez, a man of good sense who has been at the forefront of pushing for structural reforms (making him few friends in the Spanish government), announced yesterday that stress tests would be published covering all Spanish banks. .. more .. http://www.economist.com/blogs/charlemagne/2010/06/euro_crisis_2